Quiz-summary
0 of 10 questions completed
Questions:
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
Information
Certdemhy free practice questions
You have already completed the quiz before. Hence you can not start it again.
Quiz is loading...
You must sign in or sign up to start the quiz.
You have to finish following quiz, to start this quiz:
Results
0 of 10 questions answered correctly
Your time:
Time has elapsed
You have reached 0 of 0 points, (0)
Categories
- Not categorized 0%
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
- Answered
- Review
-
Question 1 of 10
1. Question
Which of the following is true about all other exempted securities in obligations of the United States and highly rated foreign sovereign debt securities?
Correct
According to FINRA rule 4210, all other exempted securities in obligations of the United States and highly rated foreign sovereign debt securities is any “long” or “short” positions in exempted securities other than obligations of the United States, the margin to be maintained shall be 7 percent of the current market value
Incorrect
According to FINRA rule 4210, all other exempted securities in obligations of the United States and highly rated foreign sovereign debt securities is any “long” or “short” positions in exempted securities other than obligations of the United States, the margin to be maintained shall be 7 percent of the current market value
-
Question 2 of 10
2. Question
Which of the following describes the Determination of Value for Margin Purposes?
I. Active securities dealt in on a national securities exchange shall, for margin purposes, be valued at current market prices provided
II. Options contracts on a stock or stock index, or a stock index warrant, having an expiration that exceeds nine months and that are listed or OTC (as defined in this Rule)
III. Other securities shall be valued conservatively in view of current market prices and the amount that might be realized upon liquidation
IV. Substantial additional margin must be required in all cases where the securities carried in “long” or “short” positions are subject to unusually rapid or violent changes in valueCorrect
According to FINRA rule 4210 the following describes Determination of Value for Margin Purposes:
(a) Active securities dealt in on a national securities exchange shall, for margin purposes, be valued at current market prices provided
(b) Options contracts on a stock or stock index, or a stock index warrant, having an expiration that exceeds nine months and that are listed or OTC (as defined in this Rule)
(c) Other securities shall be valued conservatively in view of current market prices and the amount that might be realized upon liquidation
(d) Substantial additional margin must be required in all cases where the securities carried in “long” or “short” positions are subject to unusually rapid or violent changes in valueIncorrect
According to FINRA rule 4210 the following describes Determination of Value for Margin Purposes:
(a) Active securities dealt in on a national securities exchange shall, for margin purposes, be valued at current market prices provided
(b) Options contracts on a stock or stock index, or a stock index warrant, having an expiration that exceeds nine months and that are listed or OTC (as defined in this Rule)
(c) Other securities shall be valued conservatively in view of current market prices and the amount that might be realized upon liquidation
(d) Substantial additional margin must be required in all cases where the securities carried in “long” or “short” positions are subject to unusually rapid or violent changes in value -
Question 3 of 10
3. Question
How many stocks in a group for broad index stock group?
Correct
According to FINRA rule 4210, it needs 25 or more stocks for broad index stock group. Not 10, 20 and 50 stocks.
Incorrect
According to FINRA rule 4210, it needs 25 or more stocks for broad index stock group. Not 10, 20 and 50 stocks.
-
Question 4 of 10
4. Question
Which of the following describes the term “aggregate discount amount” as used with reference to a Treasury bill option contract?
I. Multiplied by the annualized discount (i.e., 100 percent minus the exercise price of the option contract)
II. Multiplied by a fraction having a numerator equal to the number of days to maturity of the underlying Treasury bill on the earliest date
III. Multiplied by the quarterly discount (i.e., 100 percent minus the exercise price of the option contract)
IV. Divide by a fraction having a numerator equal to the number of days to maturity of the underlying Treasury bill on the earliest dateCorrect
According to FINRA rule 4210, the following describes the term “aggregate discount amount” as used with reference to a Treasury bill option contract:
(a) Multiplied by the annualized discount (i.e., 100 percent minus the exercise price of the option contract)
(b) Multiplied by a fraction having a numerator equal to the number of days to maturity of the underlying Treasury bill on the earliest dateIncorrect
According to FINRA rule 4210, the following describes the term “aggregate discount amount” as used with reference to a Treasury bill option contract:
(a) Multiplied by the annualized discount (i.e., 100 percent minus the exercise price of the option contract)
(b) Multiplied by a fraction having a numerator equal to the number of days to maturity of the underlying Treasury bill on the earliest date -
Question 5 of 10
5. Question
What is exercise price mean in respect of an option or warrant contract?
Correct
According to FINRA rule 4210 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. While 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, the term “exercise settlement amount” shall mean 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) and the term “expiration date” in respect of an option contract means the date and time fixed by the rules of the Options Clearing Corporation for the expiration of all option contracts covering the same underlying security or underlying index stock group and having the same expiration month as such option contract.
Incorrect
According to FINRA rule 4210 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. While 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, the term “exercise settlement amount” shall mean 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) and the term “expiration date” in respect of an option contract means the date and time fixed by the rules of the Options Clearing Corporation for the expiration of all option contracts covering the same underlying security or underlying index stock group and having the same expiration month as such option contract.
-
Question 6 of 10
6. Question
Which of the following structured for the buy side coupled with a long put and short call with the same exercise price sell?
I. The sell side exercise price exceeds the buy side exercise price
II. The buy side exercise price exceeds the sell side exercise price
III. All of which have the same contract size, underlying component or index
IV. The time of expiration, and are based on the same aggregate current underlying valueCorrect
According to FINRA rule the following are structured for the buy side coupled with a long put and short call with the same exercise price sell:
(a) The sell side exercise price exceeds the buy side exercise price
(b) The buy side exercise price exceeds the sell side exercise price
(c) All of which have the same contract size, underlying component or index
(d) The time of expiration, and are based on the same aggregate current underlying valueIncorrect
According to FINRA rule the following are structured for the buy side coupled with a long put and short call with the same exercise price sell:
(a) The sell side exercise price exceeds the buy side exercise price
(b) The buy side exercise price exceeds the sell side exercise price
(c) All of which have the same contract size, underlying component or index
(d) The time of expiration, and are based on the same aggregate current underlying value -
Question 7 of 10
7. Question
What will happen to option or stock index warrant in a member guarantees an option or stock index warrant to receive or deliver securities or foreign currencies for a customer?
Correct
According to FINRA rule 4210 , Option or stock index warrant shall be margined as if it were a put or call in a member guarantees an option or stock index warrant to receive or deliver securities or foreign currencies for a customer
Incorrect
According to FINRA rule 4210 , Option or stock index warrant shall be margined as if it were a put or call in a member guarantees an option or stock index warrant to receive or deliver securities or foreign currencies for a customer
-
Question 8 of 10
8. Question
Which of the following requirements for the case of a call option or warrant on a broad index stock group?
I. The escrow agreement must certify that the custodian holds for the account of the customer as security for the agreement either cash
II. One or more qualified securities, or any combination thereof, having an aggregate market value, computed as at the close of business on the day the call is written
III. Not less than 100 percent of the aggregate index value computed as at the same time and that the custodian will promptly pay the member the exercise settlement amount in the event the account is assigned an exercise notice
IV. The net proceeds from the sale of “short” option components may be applied to the requirementCorrect
According to FINRA rule 4210 the following are the requirements for the case of a call option or warrant on a broad index stock group:
(a) The escrow agreement must certify that the custodian holds for the account of the customer as security for the agreement either cash
(b) One or more qualified securities, or any combination thereof, having an aggregate market value, computed as at the close of business on the day the call is written
(c) that the custodian will promptly pay the member the exercise settlement amount in the event the account is assigned an exercise noticeIncorrect
According to FINRA rule 4210 the following are the requirements for the case of a call option or warrant on a broad index stock group:
(a) The escrow agreement must certify that the custodian holds for the account of the customer as security for the agreement either cash
(b) One or more qualified securities, or any combination thereof, having an aggregate market value, computed as at the close of business on the day the call is written
(c) that the custodian will promptly pay the member the exercise settlement amount in the event the account is assigned an exercise notice -
Question 9 of 10
9. Question
What will happen to escrow in the case of a put on an option contract (including a put on a broad index stock group) or stock index warrant?
Correct
According to FINRA rule 4120, escrow agreement must certify that the custodian holds for the account of the customer as security for the agreement escrow in the case of a put on an option contract (including a put on a broad index stock group) or stock index warrant.
Incorrect
According to FINRA rule 4120, escrow agreement must certify that the custodian holds for the account of the customer as security for the agreement escrow in the case of a put on an option contract (including a put on a broad index stock group) or stock index warrant.
-
Question 10 of 10
10. Question
Which of the following describes “Long” Box Spread in European-Style Options?
I. Margin must be deposited and maintained equal to at least 50 percent of the aggregate difference in the exercise prices
II. The net proceeds from the sale of “short” option components may be applied to the requirement
III. Margin purposes, the “long” box spread may be valued at an amount not to exceed 100 percent of the aggregate difference in the exercise prices
IV. The minimum amount of margin that must be maintained for the underlying component shall be the lesser of 10 percent of the aggregate exercise price of the put plus the put “out-of-the-money” amount or 25 percent of the call aggregate exercise priceCorrect
According to FINRA rule 4210, the following describes “Long” Box Spread in European-Style Options:
(a) Margin must be deposited and maintained equal to at least 50 percent of the aggregate difference in the exercise prices
(b) The net proceeds from the sale of “short” option components may be applied to the requirement
(c) Margin purposes, the “long” box spread may be valued at an amount not to exceed 100 percent of the aggregate difference in the exercise pricesIncorrect
According to FINRA rule 4210, the following describes “Long” Box Spread in European-Style Options:
(a) Margin must be deposited and maintained equal to at least 50 percent of the aggregate difference in the exercise prices
(b) The net proceeds from the sale of “short” option components may be applied to the requirement
(c) Margin purposes, the “long” box spread may be valued at an amount not to exceed 100 percent of the aggregate difference in the exercise prices