Finra Exam Series-7 Topic 7 Question 101 Discussion

Actual exam question for Finra's Series-7 exam

Question #: 101
Topic #: 7

[All Series-7 Questions]

What is the possible reward for investing in raw land?

Adeferred income

Blarge deductions

Cpotential capital appreciation

Dlack of investment risk

Show Suggested Answer

Suggested Answer: A

$200. Since XYZ is trading at 72, a November 65 call has an intrinsic value of $700. A sale at that value compared to the cost of $300 is a profit of $400. Subtract the loss of $200 on the expired put to obtain the profit of $200.

by Bambi at Sep 16, 2024, 05:36 AM

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Yvonne

13 days ago

Investing in raw land? Sounds like a great way to end up with a plot of dirt and a whole lot of headaches. Where do I sign up?!

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Alison

17 days ago

A) deferred income makes the most sense to me. You don't typically get an immediate return on raw land, but the long-term potential is there.

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Stevie

21 days ago

D) lack of investment risk? Haha, that's a good one! Investing in raw land is about as risky as it gets. That answer is a joke.

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Nieves

25 days ago

B) large deductions? Really? I'm not sure that's a valid reward for investing in raw land. Sounds like a stretch to me.

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Michael

1 days ago

A) deferred income sounds more appealing to me. It's a steady stream of money over time.

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Queen

1 months ago

C) potential capital appreciation seems like the most obvious answer here. Raw land can appreciate in value over time as the surrounding area develops.

upvoted 0 times