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Question 1 of 11
1. Question
Which of the following describes The Options Clearing Corporation?
I. The number of shares of the underlying stock (if a single stock underlies the option contract)
II. The principal amount of the underlying security (if Government security underlies the option contract);
III. The multiple of the index group value of the underlying group (if an index stock group underlies the option contract);
IV. The nominal principal amount or any permissible variant of the underlying GNMA (if a GNMA underlies the option contract) covered by the option contract.Correct
According to FINRA rule 4210, the following describes The Options Clearing Corporation:
(a) The number of shares of the underlying stock (if a single stock underlies the option contract)
(b) The principal amount of the underlying security (if a Government security underlies the option contract)
(c) The multiple of the index group value of the underlying group (if an index stock group underlies the option contract);
(d) The nominal principal amount or any permissible variant of the underlying GNMA (if a GNMA underlies the option contract) covered by the option contract.Incorrect
According to FINRA rule 4210, the following describes The Options Clearing Corporation:
(a) The number of shares of the underlying stock (if a single stock underlies the option contract)
(b) The principal amount of the underlying security (if a Government security underlies the option contract)
(c) The multiple of the index group value of the underlying group (if an index stock group underlies the option contract);
(d) The nominal principal amount or any permissible variant of the underlying GNMA (if a GNMA underlies the option contract) covered by the option contract. -
Question 2 of 11
2. Question
. Which of the following is true in index group value when used in respect of a currency index warrant or a stock index warrant?
I. $1.00 will multiplied by the numerical value reported for the index that is derived from the market prices of the currencies in the index currency group or the stocks in the stock index group
II. $1.00 divided by the applicable divisor in the prospectus
III. $1.00 will divided by the numerical value reported for the index that is derived from the market prices of the currencies in the index currency group or the stocks in the stock index group
IV. $1.00 multiplied by the applicable divisor in the prospectusCorrect
According to FINRA rule 4210, the following is true in index group value when used in respect of a currency index warrant or a stock index warrant:
(a) $1.00 will multiplied by the numerical value reported for the index that is derived from the market prices of the currencies in the index currency group or the stocks in the stock index group
(b) $1.00 divided by the applicable divisor in the prospectusIncorrect
According to FINRA rule 4210, the following is true in index group value when used in respect of a currency index warrant or a stock index warrant:
(a) $1.00 will multiplied by the numerical value reported for the index that is derived from the market prices of the currencies in the index currency group or the stocks in the stock index group
(b) $1.00 divided by the applicable divisor in the prospectus -
Question 3 of 11
3. Question
Which of the following describes type option U.S. Treasury bills — 95 days or less to maturity?
I. .35 percent of Initial and/or Maintenance Margin Required
II. 1/20 percent of Minimum Margin Required
III. The underlying principal amount for Underlying Component Value
IV. 1/2 percent of Initial and/or Maintenance Margin RequiredCorrect
According to FINRA rule 4210, the following describes type option Broad index stock group:
(a) .35 percent of Initial and/or Maintenance Margin Required
(b) 1/20 percent of Minimum Margin Required
(c) The underlying principal amount for Underlying Component ValueIncorrect
According to FINRA rule 4210, the following describes type option Broad index stock group:
(a) .35 percent of Initial and/or Maintenance Margin Required
(b) 1/20 percent of Minimum Margin Required
(c) The underlying principal amount for Underlying Component Value -
Question 4 of 11
4. Question
Which of the following describe out-of-the-money amounts in Stock Options in Option or Warrant Issue?
I. Any excess of the aggregate exercise price of the option over the current market value of the equivalent number of shares of the underlying security.
II. Any excess of the current market value of the equivalent number of shares of the underlying security over the aggregate exercise price of the option.
III. Any excess of the current market value of the underlying principal amount over the aggregate exercise price of the option.
IV. Any excess of the aggregate exercise price of the option over the current market value of the underlying principal amount.Correct
According to FINRA rule 4210, the following describe out-of-the-money amounts in Stock Options in Option or Warrant Issue:
(a) Any excess of the aggregate exercise price of the option over the current market value of the equivalent number of shares of the underlying security.
(b) Any excess of the current market value of the equivalent number of shares of the underlying security over the aggregate exercise price of the option.Incorrect
According to FINRA rule 4210, the following describe out-of-the-money amounts in Stock Options in Option or Warrant Issue:
(a) Any excess of the aggregate exercise price of the option over the current market value of the equivalent number of shares of the underlying security.
(b) Any excess of the current market value of the equivalent number of shares of the underlying security over the aggregate exercise price of the option. -
Question 5 of 11
5. Question
Which of the following describe out-of-the-money amounts in Stock Options in U.S. Treasury Options?
I. Any excess of the aggregate exercise price of the option over the current market value of the equivalent number of shares of the underlying security.
II. Any excess of the current market value of the equivalent number of shares of the underlying security over the aggregate exercise price of the option.
III. Any excess of the current market value of the underlying principal amount over the aggregate exercise price of the option.
IV. Any excess of the aggregate exercise price of the option over the current market value of the underlying principal amount.Correct
According to FINRA rule 4210 the following describe out-of-the-money amounts in Stock Options in U.S. Treasury Options:
(a) Any excess of the current market value of the underlying principal amount over the aggregate exercise price of the option.
(b) Any excess of the aggregate exercise price of the option over the current market value of the underlying principal amount.Incorrect
According to FINRA rule 4210 the following describe out-of-the-money amounts in Stock Options in U.S. Treasury Options:
(a) Any excess of the current market value of the underlying principal amount over the aggregate exercise price of the option.
(b) Any excess of the aggregate exercise price of the option over the current market value of the underlying principal amount. -
Question 6 of 11
6. Question
What index currency group mean?
Correct
According to FINRA rule 4210 index currency group mean a group of currencies whose inclusion and relative representation in the group is determined by the inclusion and relative representation of the current market prices of the currencies in a currency index. While exercise settlement amount mean is the difference between the “aggregate exercise price” and the “aggregate current index value” (as such terms are defined in the pertinent By-Laws of The Options Clearing Corporation), exercise price mean in respect of an option or warrant contract is the stated price per unit at which the underlying security may be purchased (in the case of a call) or sold (in the case of a put) upon the exercise of such option contract, European-style option mean is an option contract that can be exercised only at its expiration pursuant to the rules of The Options Clearing Corporation.
Incorrect
According to FINRA rule 4210 index currency group mean a group of currencies whose inclusion and relative representation in the group is determined by the inclusion and relative representation of the current market prices of the currencies in a currency index. While exercise settlement amount mean is the difference between the “aggregate exercise price” and the “aggregate current index value” (as such terms are defined in the pertinent By-Laws of The Options Clearing Corporation), exercise price mean in respect of an option or warrant contract is the stated price per unit at which the underlying security may be purchased (in the case of a call) or sold (in the case of a put) upon the exercise of such option contract, European-style option mean is an option contract that can be exercised only at its expiration pursuant to the rules of The Options Clearing Corporation.
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Question 7 of 11
7. Question
Which of the following requirements representing options on U.S. Government and U.S. Government Agency debt securities that qualify for exemption pursuant to SEA Rule 3a12-7?
I. Must be for a principal amount of not less than $500,000
II. 3 percent of the current value of the underlying principal amount on thirty (30) year U.S. Treasury bonds
III. Non-mortgage backed U.S. Government agency debt securities
IV. 2 percent of the current value of the underlying principal amount on all other U.S. Government and U.S. Government agency debt securitiesCorrect
According to FINRA rule 4210, the following requirements representing options on U.S. Government and U.S. Government Agency debt securities that qualify for exemption pursuant to SEA Rule 3a12-7:
(a) Must be for a principal amount of not less than $500,000
(b) 3 percent of the current value of the underlying principal amount on thirty (30) year U.S. Treasury bonds
(c) Non-mortgage backed U.S. Government agency debt securities
(d) 2 percent of the current value of the underlying principal amount on all other U.S. Government and U.S. Government agency debt securitiesIncorrect
According to FINRA rule 4210, the following requirements representing options on U.S. Government and U.S. Government Agency debt securities that qualify for exemption pursuant to SEA Rule 3a12-7:
(a) Must be for a principal amount of not less than $500,000
(b) 3 percent of the current value of the underlying principal amount on thirty (30) year U.S. Treasury bonds
(c) Non-mortgage backed U.S. Government agency debt securities
(d) 2 percent of the current value of the underlying principal amount on all other U.S. Government and U.S. Government agency debt securities -
Question 8 of 11
8. Question
Which of the following contracts under category (4) must be for a principal amount of not less than $500,000 is true in U.S. Government mortgage related or corporate debt securities options?
I. Any excess of the product of the index group value and the applicable multiplier over the aggregate exercise price of the option.
II. Any excess of the aggregate exercise price of the option over the product of the index group value and the applicable multiplier.
III. Any excess of the aggregate exercise price of the option over the current value of the underlying principal amount.
IV. Any excess of the current value of the underlying principal amount over the aggregate exercise price of the option.Correct
According to FINRA rule 4210, the following contracts under category (4) must be for a principal amount of not less than $500,000 is true in U.S. Government mortgage related or corporate debt securities options:
(a) Any excess of the aggregate exercise price of the option over the current value of the underlying principal amount.
(b) Any excess of the current value of the underlying principal amount over the aggregate exercise price of the option.Incorrect
According to FINRA rule 4210, the following contracts under category (4) must be for a principal amount of not less than $500,000 is true in U.S. Government mortgage related or corporate debt securities options:
(a) Any excess of the aggregate exercise price of the option over the current value of the underlying principal amount.
(b) Any excess of the current value of the underlying principal amount over the aggregate exercise price of the option. -
Question 9 of 11
9. Question
What is OTC mean as used with reference to a call or put option contract?
Correct
According FIRNA rule 4210 OTC mean as used with reference to a call or put option contract is an over-the-counter option contract that is not traded on a national securities exchange and is issued and guaranteed by the carrying broker-dealer. While the term “numerical index value,” when used in respect of a currency index warrant or stock index warrant, shall mean the level of a particular currency index or stock index as reported by the reporting authority for the index, exercise price mean in respect of an option or warrant contract is the stated price per unit at which the underlying security may be purchased (in the case of a call) or sold (in the case of a put) upon the exercise of such option contract, European-style option mean is an option contract that can be exercised only at its expiration pursuant to the rules of The Options Clearing Corporation.
Incorrect
According FIRNA rule 4210 OTC mean as used with reference to a call or put option contract is an over-the-counter option contract that is not traded on a national securities exchange and is issued and guaranteed by the carrying broker-dealer. While the term “numerical index value,” when used in respect of a currency index warrant or stock index warrant, shall mean the level of a particular currency index or stock index as reported by the reporting authority for the index, exercise price mean in respect of an option or warrant contract is the stated price per unit at which the underlying security may be purchased (in the case of a call) or sold (in the case of a put) upon the exercise of such option contract, European-style option mean is an option contract that can be exercised only at its expiration pursuant to the rules of The Options Clearing Corporation.
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Question 10 of 11
10. Question
What is the major requirement agreement for the escrow?
Correct
Incorrect
According to FINRA rule 4210, the major requirement agreement for the escrow is to certify that the custodian holds for the account of the customer as security.
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Question 11 of 11
11. Question
Which of the following requirement may describes the amount of margin may be the margin on the put or call, whichever is greater, as required pursuant?
I. A stock index call warrant position is carried “short” for a customer account and is offset by a “short” stock index put warrant and/or stock index put option position
II. A stock index put warrant position is carried “short” for a customer account and is offset by a “short” stock index call warrant and/or stock index call option position’
III. An index call warrant position is carried “short” for a customer account and is offset by a “short” index put warrant and/or index put option position
IV. An index put warrant position is carried “short” for a customer account and is offset by a “short” index call warrant and/or index call option positionCorrect
According to FINRA rule 4210, the following requirement may describes the amount of margin (a) A stock index call warrant position is carried “short” for a customer account and is offset by a “short” stock index put warrant and/or stock index put option position
(b) A stock index put warrant position is carried “short” for a customer account and is offset by a “short” stock index call warrant and/or stock index call option position’
(c) An index call warrant position is carried “short” for a customer account and is offset by a “short” index put warrant and/or index put option position
(d) An index put warrant position is carried “short” for a customer account and is offset by a “short” index call warrant and/or index call option positionIncorrect
According to FINRA rule 4210, the following requirement may describes the amount of margin (a) A stock index call warrant position is carried “short” for a customer account and is offset by a “short” stock index put warrant and/or stock index put option position
(b) A stock index put warrant position is carried “short” for a customer account and is offset by a “short” stock index call warrant and/or stock index call option position’
(c) An index call warrant position is carried “short” for a customer account and is offset by a “short” index put warrant and/or index put option position
(d) An index put warrant position is carried “short” for a customer account and is offset by a “short” index call warrant and/or index call option position