Options Test Questions - Bond Exam Questions

Options and bonds make up a large part of the Series 7 licensing Test. These are recent exam questions reported from students of American Investment Training.

1. An investor Buys 2 MAR 75 Calls, paying $300 for each. The breakeven point for both of these is:

A) 69
B) 72
C) 78
D) 81

Correct answer is C: The breakeven for call options is the strike price plus the premium. The breakeven is always based on each contract (“one for one”)


2.A common shareholder would have the right to vote for all of the following EXCEPT:

A) The declaration of a dividend
B) Board of director elections
C) The issue of new convertible securities
D) Forward stock split


Correct answer is A: The board of directors can declare a dividend without shareholder approval. Once the dividend is declared, each shareholder is entitled to an equal share in the dividend, proportioned to their ownership in the company.


3. Bonds purchased at a discount will mature:

A) Below par
B) Above par
C) At par
D) None of the above


Correct answer is C: All bonds mature at par, regardless of their original purchase
price.


4. A “Positive” treasury yield curve occurs when:

A) Long term yields are equal to short term yields
B) Long term yields are higher than short term yields
C) Long term yields are lower than short term yields
D) There is more buying of long term bonds


Correct answer is B: A positive yield curve is when the curve ascends upward. Yields climb higher as you go longer term. A negative or inverted yield curve is when the opposite takes place.

Learn options, bonds and all of the major topics online by viewing American Investment Training's Virtual University for Series 7 prep.


Series 7 and 66 Online Virtual Courses - Series 24, 6 and 65 included.

Your Life. Your resume. Your Move! Post Your Resume FREE Today!


Post a Business ad for free Nick's Classifieds