Series 4 Sample Questions
Our Questions Mimic the Real Exam
Our courses reinforce retention over memorization with in-depth content and practice questions that mimic the actual test — so there are no surprises come exam day.
Closed & Open Stem
Most/Least/Best
Except or Not
Complex Multiple Choice
Which position is profitable in a rising market?
A.
bear put spread
B.
bull call spread
C.
short straddle
D.
short naked call
Which of the following strategies has unlimited loss potential?
A.
long stock/short call
B.
long stock/long put
C.
short stock/long call
D.
short stock/short put
The sale of covered calls is used to:
A.
hedge a long stock position in a falling market
B.
protect a short stock position in a falling market
C.
generate additional income in a stable market
D.
profit if the market drops
"Intrinsic value" is defined as the:
A.
excess of premium over the underlying security’s market price
B.
excess of time premium over the "in the money" amount
C.
difference between the strike price and market price of the underlying security, if exercise is profitable to the holder
D.
maximum potential gain on a contract
In November, a customer buys 1 ABC Jan 70 Call @ $4 when the market price of ABC is 71. If ABC falls to $67 and stays there through January, the customer will:
A.
Gain $400
B.
Lose $400
C.
Gain $6,700
D.
Lose $6,700