SIE exam caril| 288 Questions| With Complete Solutions

What type of risk is unique to a specific industry, business enterprise, or investment type? correct answer: Nonsystematic risk Under which of the following circumstances is an investor in a position to acquire stock? correct answer: Buy a call, sell a call (The holder of a call has the right to buy stock at the strike price if exercised. The seller of a put is obligated to buy stock at the strike price if exercised) Options- a premium correct answer: the cost of an option contract, expressed in dollars per share of the underlying stock Options- strike price correct answer: The price at which the stock will be bought or sold if the contract is exercised, expressed in dollars per share A customer believes that ABC's price will go up but does not have the money to buy 100 shares right now. How could the customer use options to profit from an increase in the stock's price? correct answer: buy calls, write puts (both are bullish) A corporation's offer to current stockholders of the ability to purchase a proportionate number of new shares at a specific price for a limited time is called a correct answer: right (they usually expire in 30-45 days) American depositary receipts (ADRs) correct answer: issued by banks, represent a specific number of shares of a foreign