Finra Series-7 Exam - Topic 7 Question 21 Discussion

Actual exam question for Finra's Series-7 exam

Question #: 21
Topic #: 7

Bubba buys one XYZ June 40 call for $1,000 and sells one XYZ March 40 call for $600. Subsequently, the June call is closed for $1,200 and the March call for $900.

What is Bubba's net result?

A$100 loss

B$100 profit

C$200 loss

D$200 profit

Show Suggested Answer

Suggested Answer: A

$100 profit. The long position in the June call is a $200 profit ($1,200 - $1,000). The short position in the March call is a $300 loss ($900 - $300). Combining the gain and loss results in a $100 loss.

by Roxane at May 05, 2022, 06:01 AM

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Tyisha

8 months ago

Definitely a win for Bubba!

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Donte

9 months ago

Wait, are we sure about those numbers?

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Heike

9 months ago

Sounds like a $100 profit to me!

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Tracey

9 months ago

He sold the March call for $600 and closed it for $900.

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Alease

9 months ago

Bubba spent $1,000 on the June call and made $1,200.

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Dannette

9 months ago

I'm a bit confused about the closing prices. Did we factor in the initial premiums correctly? I hope I remember the math right!

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Theron

9 months ago

I think we need to look at the initial costs and the closing amounts. If I recall correctly, the June call was a gain, but the March call was a loss.

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Titus

9 months ago

I remember something about calculating the net result by subtracting the total costs from the total revenues, but I'm not entirely sure how to apply it here.

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Lai

9 months ago

I practiced a similar question where we had to calculate profits and losses from options trades. I think the key is to add the gains and losses correctly.

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Amos

9 months ago

This seems like a straightforward question about the FATF's mutual evaluations. I think the key is to focus on the wording of the question and the answer choices.

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Timothy

10 months ago

This seems like a straightforward question about HR profiles. I think the answer is probably A - personal employee data, since that's the kind of information typically found in an HR profile.

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Mammie

10 months ago

This seems like a straightforward question about Cisco's security threat detection time. I'll review the options carefully and go with the one that best matches the information provided.

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