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Question 1 of 10
1. Question
What is the outstanding mean in respect of a contract option?
Correct
Outstanding
According to FINRA rule 2360, the term “outstanding” in respect of an option contract means an option contract which has neither been the subject of a closing sale transaction nor has been exercised nor reached its expiration date. While the term “series of options” means all option contracts of the same class of options having the same exercise price and expiration date and which cover the same number of units of the underlying security or index, the term “short position” means the number of outstanding option contracts of a given series of options with respect to which a person is obligated as a writer (seller) and the term “standardized index option” means any options contract issued, or subject to issuance, by The Options Clearing Corporation that is based upon an index and is not an OCC Cleared OTC Option.Incorrect
Outstanding
According to FINRA rule 2360, the term “outstanding” in respect of an option contract means an option contract which has neither been the subject of a closing sale transaction nor has been exercised nor reached its expiration date. While the term “series of options” means all option contracts of the same class of options having the same exercise price and expiration date and which cover the same number of units of the underlying security or index, the term “short position” means the number of outstanding option contracts of a given series of options with respect to which a person is obligated as a writer (seller) and the term “standardized index option” means any options contract issued, or subject to issuance, by The Options Clearing Corporation that is based upon an index and is not an OCC Cleared OTC Option. -
Question 2 of 10
2. Question
Which of the following is true in Collars?
Correct
According to FINRA rule 2360, Collar is a short call position accompanied by a long put position, where the short call expires with the long put, and the strike price of the short call equals or exceeds the strike price of the long put position and where each short call and long put position is hedged with 100 shares (or other adjusted number of shares) of the underlying security or securities convertible into such underlying security. The choices a, b and d are not correct.
Incorrect
According to FINRA rule 2360, Collar is a short call position accompanied by a long put position, where the short call expires with the long put, and the strike price of the short call equals or exceeds the strike price of the long put position and where each short call and long put position is hedged with 100 shares (or other adjusted number of shares) of the underlying security or securities convertible into such underlying security. The choices a, b and d are not correct.
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Question 3 of 10
3. Question
Who is entitled to purchase from The Options Clearing Corporation?
Correct
According to FINRA rule 2360, the holder is entitled to purchase The Options Clearing Corporation. The rich person, the stranger and the president are not entitled to purchase The Option Clearing Corporation unless they are holder.
Incorrect
According to FINRA rule 2360, the holder is entitled to purchase The Options Clearing Corporation. The rich person, the stranger and the president are not entitled to purchase The Option Clearing Corporation unless they are holder.
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Question 4 of 10
4. Question
Which of the following are true in regards with Anti-Money Laundering Compliance Program?
I. Establish and implement policies and procedures that can be reasonably expected to detect
II. Establish and implement policies, procedures, and internal controls reasonably designed to achieve compliance with the Bank Secrecy Act and the implementing regulations thereunder
III. They shall contain general explanatory information relating to the mechanics of buying, writing and exercising options
IV. Each member shall develop and implement a written anti-money laundering program reasonably designed to achieveCorrect
Under FINRA rule 3310, Anti-Money Laundering Compliance Program means
(a) Each member shall develop and implement a written anti-money laundering program reasonably designed to achieve
(b) Establish and implement policies and procedures that can be reasonably expected to detect
(c) Establish and implement policies, procedures, and internal controls reasonably designed to achieve compliance with the Bank Secrecy Act and the implementing regulations thereunderIncorrect
Under FINRA rule 3310, Anti-Money Laundering Compliance Program means
(a) Each member shall develop and implement a written anti-money laundering program reasonably designed to achieve
(b) Establish and implement policies and procedures that can be reasonably expected to detect
(c) Establish and implement policies, procedures, and internal controls reasonably designed to achieve compliance with the Bank Secrecy Act and the implementing regulations thereunder -
Question 5 of 10
5. Question
Which of the following equity security comprising the basket or index?
I. The market capitalization of at least $75 million
II. The case of the lowest weighted component securities in the basket or index that in the aggregate account for no more than 10% of the weight of the index, $50 million
III. The trading volume for each of the preceding six months of at least one million shares
IV. No equity security comprises more than 30% of the equity security component of the basket’s or index’s weightingCorrect
According to FINRA rule 2360, the following are the equity security comprising the basket or index:
a) The market capitalization of at least $75 million
b) The case of the lowest weighted component securities in the basket or index that in the aggregate account for no more than 10% of the weight of the index, $50 million
c) The trading volume for each of the preceding six months of at least one million sharesIncorrect
According to FINRA rule 2360, the following are the equity security comprising the basket or index:
a) The market capitalization of at least $75 million
b) The case of the lowest weighted component securities in the basket or index that in the aggregate account for no more than 10% of the weight of the index, $50 million
c) The trading volume for each of the preceding six months of at least one million shares -
Question 6 of 10
6. Question
Which of the following satisfies the criteria in conventional index option?
I. The basket or index comprises 9 or more equity securities
II. No equity security comprises more than 30% of the equity security component of the basket’s or index’s weighting
III. Each equity security comprising the basket or index
IV. The degree of contact and communication between directors and/or managers of separate accountsCorrect
According to the FINRA rule 2360, the following satisfies the criteria in conventional index option:
(a) The basket or index comprises 9 or more equity securities
(b) No equity security comprises more than 30% of the equity security component of the basket’s or index’s weighting
(c) Each equity security comprising the basket or indexIncorrect
According to the FINRA rule 2360, the following satisfies the criteria in conventional index option:
(a) The basket or index comprises 9 or more equity securities
(b) No equity security comprises more than 30% of the equity security component of the basket’s or index’s weighting
(c) Each equity security comprising the basket or index -
Question 7 of 10
7. Question
Which of the following circumstances does control be presumed in terms of the power or ability of an individual or entity to make investment decisions for an account or accounts?
I. Among all parties to a joint account who have authority to act on behalf of the account
II. Among all general partners to a partnership account
III. When accounts have common directors or management
IV. Where a person or entity has the authority to execute transactions in an accountCorrect
According to FINRA rule 2360, the following are the circumstances does the control presumed in terms of the power or ability of an individual or entity to make investment decisions for an account or accounts.
(a) Among all parties to a joint account who have authority to act on behalf of the account
(b) Among all general partners to a partnership account
(c) When accounts have common directors or management
(d) Where a person or entity has the authority to execute transactions in an accountIncorrect
According to FINRA rule 2360, the following are the circumstances does the control presumed in terms of the power or ability of an individual or entity to make investment decisions for an account or accounts.
(a) Among all parties to a joint account who have authority to act on behalf of the account
(b) Among all general partners to a partnership account
(c) When accounts have common directors or management
(d) Where a person or entity has the authority to execute transactions in an account -
Question 8 of 10
8. Question
How many percent does the minimum maintenance margin need for the future contract long and short?
Correct
According to FINRA rule 4210, It needs 20 percent minimum maintenance margin for the future contract long and short.
Incorrect
According to FINRA rule 4210, It needs 20 percent minimum maintenance margin for the future contract long and short.
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Question 9 of 10
9. Question
Which of the following is true in Reverse Conversions?
Correct
Under FINRA rule 2360, Reverse call is a long call position accompanied by a short put position, where the long call expires with the short put, and the strike price of the long call and short put is equal, and where each long call and short put position is hedged with 100 shares. On the given choices b, c and d is not correct.
Incorrect
Under FINRA rule 2360, Reverse call is a long call position accompanied by a short put position, where the long call expires with the short put, and the strike price of the long call and short put is equal, and where each long call and short put position is hedged with 100 shares. On the given choices b, c and d is not correct.
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Question 10 of 10
10. Question
What is Put mean?
Correct
Under FINRA rule 2360, The term put is an option contract under which the holder of the option has the right, in accordance with the terms of the option, to sell the number of units of the underlying security. While the term “premium” means the aggregate price of the option contracts agreed upon between the buyer and writer/seller or their agents, the term “options trading” means trading (A) in any option issued by The Options Clearing Corporation, and (B) in any conventional option and the term “options contract equivalent of the net delta” means the net delta divided by the number of shares underlying the options contract.
Incorrect
Under FINRA rule 2360, The term put is an option contract under which the holder of the option has the right, in accordance with the terms of the option, to sell the number of units of the underlying security. While the term “premium” means the aggregate price of the option contracts agreed upon between the buyer and writer/seller or their agents, the term “options trading” means trading (A) in any option issued by The Options Clearing Corporation, and (B) in any conventional option and the term “options contract equivalent of the net delta” means the net delta divided by the number of shares underlying the options contract.