SIE Mastery Exam Questions and Answers | 100% Correct Answer | Grade A+
Regarding delivery for listed option contracts when exercised, which of the following is true? A) Equity options are cash settled in U.S. dollars. B) Equity and index options are settled in U.S. dollars. C) Currency and index options are cash settled in U.S. dollars. D) Currency and equity options are settled in the underlying security. Ans: C) Currency and index options are cash settled in U.S. dollars. When exercised, equity options are settled in the underlying security. This means that the underlying shares must be delivered by the short party assigned. However, when currency and index options are exercised, they are settled in cash. This means that U.S. dollars must be delivered by the short party assigned. Your customer is interested in Sierra Verde Coffee Company stock, which is currently trading at $22 a share. She would like to buy 400 shares, but not for more than $20 a share. Which order best meets her request? A) Buy limit at $20 B) Buy stop at $20 C) Sell stop at $20 D) Sell limit at $20 Ans: A) Buy limit at $20 The buy limit is the best order to fulfill her request to buy the shares for no more than $20 a share. A sell order would sell shares, not buy. The buy stop order cannot be entered when the stock is already ab
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