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Finra Series-7 Exam - Topic 7 Question 21 Discussion

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

Finra Series-7 Exam - Topic 7 Question 21 Discussion

Actual exam question for Finra's Series-7 exam
Question #: 21
Topic #: 7
[All Series-7 Questions]

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?

Show Suggested Answer Hide 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
10 months ago
Definitely a win for Bubba!
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Donte
10 months ago
Wait, are we sure about those numbers?
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Heike
11 months ago
Sounds like a $100 profit to me!
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Tracey
11 months ago
He sold the March call for $600 and closed it for $900.
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Alease
11 months ago
Bubba spent $1,000 on the June call and made $1,200.
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Dannette
11 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
11 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
11 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
11 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
11 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
11 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
11 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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