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Finra Series-7 Exam - Topic 4 Question 11 Discussion

Actual exam question for Finra's Series-7 exam
Question #: 11
Topic #: 4
[All Series-7 Questions]

Which of the following is true about option prices?

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Suggested Answer: D

premiums on options of volatile stocks are usually larger than on less volatile stocks. The likelihood of exercise increases with the volatility of a stock. Therefore, a higher premium is demanded.


by Merlyn at May 09, 2022, 02:01 AM

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Nicolette
3 months ago
I agree with A and C, but D feels a bit off to me.
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Benton
3 months ago
Wait, are we sure about B? Higher price doesn’t always mean higher premium.
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Maryln
3 months ago
D makes sense too; volatility usually drives up premiums.
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Kirk
4 months ago
I think C is spot on. Well-known companies attract more interest.
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Vanesa
4 months ago
A is definitely true! Listed stocks have more liquidity.
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Monte
4 months ago
I’m leaning towards D as well, but I’m a bit confused about how much volatility really affects the premiums compared to other factors.
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Gracia
4 months ago
I practiced a question similar to this, and I think C makes sense because well-known companies tend to have more demand.
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Edna
4 months ago
I’m not too sure, but I feel like A could be true since listed stocks have more liquidity.
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Hoa
5 months ago
I think I remember that option premiums are influenced by volatility, so maybe D is the right choice?
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Jerry
5 months ago
Okay, I think I've got this. Deposit insurance protects funds on deposit if the financial institution fails, and it can be provided by the FDIC or NCUA. So the answer is definitely A. Deposit Insurance.
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Man
5 months ago
Option D sounds like the best answer to me. Testing early helps identify and fix defects quickly, which reduces the overall cost of development.
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Cassandra
5 months ago
Ah, I remember learning about this in class. The three classes are owner/group/world, so I'll select option A.
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