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45) When a put option is exercised, the:
A) seller of the option receives the strike price.
B) seller of the option receives the option premium.
C) buyer of the option sells the underlying asset and receives the option premium.
D) buyer of the option pays the option premium and receives the underlying asset.
E) seller of the option must buy the underlying asset and pay the strike price.
46) You will earn a profit as the owner of a call option if the price of the underlying asset:
A) decreases.
B) remains constant or decreases.
C) remains constant.
D) remains constant or increases.
E) increases.
47) The seller of a naked call is betting that the price of the underlying asset will:
A) decrease.
B) increase.
C) decrease and then increase prior to the expiration date.
D) will remain constant for a period of time and then increase prior to the expiration date.
E) have no effect on the value of the call.
48) Options expire on the ________ of the expiration month.
A) last trading day
B) 3rd Friday
C) last Friday
D) Saturday following the 3rd Friday
E) Saturday following the last Friday
Use these option quotes to answer this question:
Strike
Symbol
Last
Chg
Bid
Ask
Vol
Open Int
47.50
JLHW.X
6.00
↑
0.25
5.90
6.10
18
12
50.00
JLHJ.X
4.75
↑
0.30
4.80
5.00
17
14
49) The price you will pay (per underlying share) to buy the 50 call option on JL stock is:
A) $4.75.
B) $4.80.
C) $5.00.
D) $5.90.
E) $6.00.
50) What price will you receive (per underlying share) if you sell the 47.50 call option on JL
stock?
A) $4.80
B) $5.00
C) $5.90
D) $6.00
E) $6.10
51) What was the prior day's closing price on the 50 call option on JL stock?
A) $4.45
B) $4.75
C) $5.05
D) $5.10
E) $5.30
52) You own twelve (12) 6.25 percent coupon bonds with a total maturity value of $12,000. How
much will you receive every six months as an interest payment?
A) $213.50
B) $375.00
C) $427.00
D) $540.00
E) $750.00
53) A 5.5 percent coupon bond is currently quoted at 88.3 and has a face value of $1,000. What
is the amount of each semi-annual coupon payment if you own four (4) of these bonds?
A) $56.25
B) $75.00
C) $100.46
D) $110.00
E) $200.93
54) A $1,000 face value bond has a 6.85 percent semi-annual coupon and sells for $980.00. What
is the current yield?
A) 6.75 percent
B) 6.82 percent
C) 6.89 percent
D) 6.99 percent
E) 6.61 percent
55) A 7 percent coupon bond has a face value of $1,000 and pays interest annually. The current
yield is 6.8 percent. What is the current price of this bond?
A) $971.43
B) $978.41
C) $1,068.00
D) $1,029.41
E) $1,104.00
Use the following bond quotes to answer this question:
Company
Coupon
Maturity
High
Low
Last
Change
Yield
Talliru Co.
7.60
Nov 2012
100.05
99.68
99.89
0.02
?
Zeus
8.25
Apr 2016
102.41
101.87
102.03
-0.10
?
56) The Zeus Company bond pays interest semi-annually. You own six of these bonds. What is
the amount you will receive as your next interest payment?
A) $76.00
B) $228.00
C) $190.00
D) $247.50
E) $304.00
Use the following bond quotes to answer this question:
Company
Coupon
Maturity
High
Low
Last
Change
Yield
Talliru Co.
7.60
Nov 2012
100.05
99.64
99.89
0.02
?
Zeus
8.25
Apr 2016
102.41
101.87
102.03
-0.10
?
57) If you purchase five Zeus bonds, the cost will be ________ and the annual interest income
will be ________.
A) $5,000.00; $388.75
B) $5,000.00; $412.50
C) $5,000.00; $460.00
D) $5,101.50; $412.50
E) $5,101.50; $460.00
Use the following stock quotes to answer this question:
52 WEEK
Company
Volume
Div
Close
Chg
High
Low
Buy Rite
5,078,420
1.40
101.13
-0.05
04.90
82.13
Cloverdale
47,126,338
0.72
21.48
+0.01
30.15
16.80
Ditch Digger
11,298,006
0.48
48.19
-0.13
55.62
48.19
58) What is the current yield on Buy Rite stock?
A) 1.38 percent
B) 2.60 percent
C) 3.55 percent
D) 4.25 percent
E) 5.20 percent
Use the following stock quotes to answer this question:
52 WEEK
Company
Volume
Close
Chg
High
Low
Aldridge Inc
32,653,080
34.50
-0.20
41.60
33.90
Baker Co
11,508,900
78.10
-2.30
82.30
74.60
Chelsea Ind
51,873,450
48.20
4.10
48.60
29.40
59) John owns 300 shares of Aldridge stock. What is the current value of his shares?
A) $6,605
B) $8,820
C) $9,640
D) $9,850
E) $10,350
Use the following stock quotes to answer this question:
52 WEEK
Company
Volume
Close
Chg
High
Low
Aldridge Inc
32,653,080
34.50
-0.20
41.60
33.90
Baker Co
11,508,900
78.10
-2.30
82.30
74.60
Chelsea Ind
51,873,450
48.20
4.10
48.60
29.40
60) Aldridge, Inc. pays an annual dividend of $1.18. What is the dividend yield on this stock?
A) 2.09 percent
B) 3.42 percent
C) 4.60 percent
D) 7.20 percent
E) 8.04 percent
61) Baker Company has 136,000 shares of stock outstanding and a PE ratio of 18. What was the
net income for the most recent four quarters?
A) $590,089
B) $678,003
C) $727,972
D) $1,306,900
E) $1,405,800
62) What was the previous day's closing price for Baker Co. stock?
A) $44.70
B) $54.10
C) $68.20
D) $78.10
E) $80.40
63) Vivian purchased 700 shares of Aldridge, Inc. stock at what turns out to be the lowest price
during the past year. How much has the value of her shares changed since she made this
investment?
A) -$4,970
B) $60
C) $1,950
D) $420
E) $5,390
64) What is the latest earnings per share for Baker Co. stock if the PE is 22?
A) $1.06
B) $1.10
C) $2.19
D) $3.55
E) $4.10
65) A pension fund purchased 20 round lots of Chelsea Company stock at the closing price of the
day yesterday. What was the cost of that purchase?
A) $4,410
B) $8,040
C) $88,200
D) $101,200
E) $156,800
Use the following soybean futures quotes to answer this question.
Soybeans: 5,000 bushels, cents and 1 / 8 ths of a cent per bushel
Exp
Last
Net Chg
Open
High
Low
Settle
08 Sep
1314′0
-3′4
1340′2
1340′6
1313′4
1314′0
08 Nov
1285′2
+4′2
1306′0
1312′2
1280′0
1285′2
66) Last week, you purchased four November 08 soybean futures contracts when the price quote
was 1300΄6. What is your current profit or loss on this investment?
A) -$3,100.00
B) -$2,625.00
C) -$31.00
D) $987.50
E) $3,350.00
Use the following soybean futures quotes to answer this question:
Soybeans: 5,000 bushels, cents and 1 / 8 ths of a cent per bushel
Exp
Last
Net Chg
Open
High
Low
Settle
08 Sep
1314′0
-3′4
1340′2
1340′6
1313′4
1314′0
08 Nov
1285′2
+4′2
1306′0
1312′2
1280′0
1285′2
67) Julie was lucky enough to purchase two September 08 futures contracts on soybeans when
the contracts were at the lowest price of the day. What is Julie's total profit or loss as of the end
of the day?
A) $25.00
B) $50.00
C) $60.00
D) $250.00
E) $260.00
68) What was the total price fluctuation on one September 08 soybeans contract today?
A) $1,337.50
B) $1,362.50
C) $1,412.50
D) $1,460.00
E) $1,482.50
Use the following soybean futures quotes:
Soybeans: 5,000 bushels, cents and 1 / 8 ths of a cent per bushel
Exp
Last
Net Chg
Open
High
Low
Settle
08 Sep
1318′6
-2′4
1320′2
1330′6
1308′4
1318′6
08 Nov
1287′2
+0′2
1288′0
1327′4
1276′6
1287′2
69) You purchased four November 08 futures contracts on soybeans when they first became
available this morning. Your investment has been worth as little as ________ and as much as
________.
A) $255,350; $265,500
B) $255,350; $265,020
C) $257,440; $265,500
D) $257,440; $265,020
E) $257,440; $265,520
70) You purchased five August 13 futures contracts on soybeans at a price quote of 1056′6. Each
contract is for 5,000 bushels with the price quoted in cents and 1/8 ths of a cent per bushel.
Assume the contract price is 1061′4 when you close out your contract six weeks from now. What
will be your total profit or loss on this investment?
A) $950.25
B) $1,187.50
C) $6,480.75
D) $16,200.50
E) $24,000.00
