Series 7- Options Exam 2025
Questions and Answers
If an equity call holder exercises a contract, the holder must deliver:
A. cash in 1 business day
B. stock in 1 business day
C. cash in 2 business days
D. stock in 2 business days - ANSWER✔✔-C. cash in 2 business days
The holder of a call on a listed stock exercises. The holder must:
I deliver stock
II deliver cash
III take delivery of stock
IV take delivery of cash - ANSWER✔✔-C. II and III- Deliver cash & take delivery of
stock
If the writer of an equity call contract is exercised, the writer must deliver:
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,A. cash in 1 business day
B. stock in 1 business day
C. cash in 2 business days
D. stock in 2 business days - ANSWER✔✔-D. stock in 2 business days
A customer would sell call contracts because the customer:
A. is bullish on the underlying security
B. is bearish on the underlying security
C. wishes to generate earned income
D. wishes to defer taxation of gains on the underlying stock - ANSWER✔✔-B. is bearish
on the underlying security
A customer would buy put contracts because the customer:
A. is bullish on the underlying security
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, B. is bearish on the underlying security
C. is neutral on the underlying security
D. wishes to generate ordinary income - ANSWER✔✔-B. is bearish on the underlying
security
An investor purchases 1 ABC Jan 45 Put @ $3. The investor subsequently exercises his
option contract. The holder has the right to:
A. buy stock at $42 per share
B. buy stock at $45 per share
C. sell stock at $42 per share
D. sell stock at $45 per share - ANSWER✔✔-D. sell stock at $45 per share
An investor writes 1 ABC Jan 45 Put @ $3. The contract subsequently is exercised. The
writer is obligated to:
A. buy stock at $42 per share
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Questions and Answers
If an equity call holder exercises a contract, the holder must deliver:
A. cash in 1 business day
B. stock in 1 business day
C. cash in 2 business days
D. stock in 2 business days - ANSWER✔✔-C. cash in 2 business days
The holder of a call on a listed stock exercises. The holder must:
I deliver stock
II deliver cash
III take delivery of stock
IV take delivery of cash - ANSWER✔✔-C. II and III- Deliver cash & take delivery of
stock
If the writer of an equity call contract is exercised, the writer must deliver:
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,A. cash in 1 business day
B. stock in 1 business day
C. cash in 2 business days
D. stock in 2 business days - ANSWER✔✔-D. stock in 2 business days
A customer would sell call contracts because the customer:
A. is bullish on the underlying security
B. is bearish on the underlying security
C. wishes to generate earned income
D. wishes to defer taxation of gains on the underlying stock - ANSWER✔✔-B. is bearish
on the underlying security
A customer would buy put contracts because the customer:
A. is bullish on the underlying security
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, B. is bearish on the underlying security
C. is neutral on the underlying security
D. wishes to generate ordinary income - ANSWER✔✔-B. is bearish on the underlying
security
An investor purchases 1 ABC Jan 45 Put @ $3. The investor subsequently exercises his
option contract. The holder has the right to:
A. buy stock at $42 per share
B. buy stock at $45 per share
C. sell stock at $42 per share
D. sell stock at $45 per share - ANSWER✔✔-D. sell stock at $45 per share
An investor writes 1 ABC Jan 45 Put @ $3. The contract subsequently is exercised. The
writer is obligated to:
A. buy stock at $42 per share
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