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NEW QUESTION 31
When does a call option provide the most value to its holder?
Answer: B
Explanation:
when the underlying stock price is rising. That's why the holder of this option wants to have a right to "call" the stock.
NEW QUESTION 32
Bubba buys one XYZ September 50 call at $7 and sells one XYZ September 60 call at $3. At that time, XYZ stock is at $55. Bubba has no other stock positions.
What is Bubba's maximum possible profit?
Answer: B
Explanation:
$600. The maximum profit is the difference between strike prices less the debit amount. The debit amount is $4 ($7 - $3). The difference between strike prices is $10 ($60 - $50). Multiply the $6 difference by 100, which is the number of shares on one option.
NEW QUESTION 33
Which of the following is not true about US treasury bills?
Answer: B
Explanation:
they are issued in denominations of $1,000 to $1,000,000. Remember, the question asks what is "not" true. The smallest denomination for a US treasury bill is $10,000.
NEW QUESTION 34
Under which of the following conditions may a registered representative of a firm that is an underwriter of a new offering of common stock send to a client a copy of the firm's research report on that stock?
Answer: A
Explanation:
Explanation/Reference:
Explanation: under no circumstances. The representative may send the red herring but not a research report of his firm.
NEW QUESTION 35
Which of the following is considered a firm quotation in the over-the-counter market?
Answer: C
Explanation:
27.50. Anytime there is qualifying language attached to a quotation it is not considered firm.
NEW QUESTION 36
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