QUESTION $4$

All of the following are advantages of buying call options instead of stock EXCEPT:

a$.$ options represent an opportunity to control shares of stock without making a large dollar commitment.

b$.$commissions on stock trading are greater than those on options trading.

c$.$ options can be quite conservative and used to reduce risk.

d$.$ all of the above are advantages.

QUESTION $8$

Block Corp's $40$ call option is being sold for $$6,$ while the common stock is being sold for $$41.$ The intrinsic value is:

a$.$ $$6,$ and the speculative premium is $$1.$

b$.$ $$1,$ and the speculative premium is $$5.$

c$.$ $$1,$ and the speculative premium is $$7.$

d$.$ $$5,$ and the speculative premium is $$7.$

QUESTION $10$

Which of the following is NOT an advantage of investing in stock index futures for the speculator?

a$.$ The elimination of unsystematic risk

b$.$ Manipulation by insiders is less likely than with individual securities

c$.$ Maximum leverage potential

d$.$ All of the above are advantages

QUESTION $12$

The loss on an option purchase is always

a$.$ limited to the premium paid.

b$.$ limited to the margin maintenance requirement.

c$.$ the difference between the strike price and the premium paid.

d$.$ None of the above

QUESTION $13$

Program trading calls for:

a$.$ computer$-$based trigger points for large trades.

b$.$ the use of computer programs to measure performance.

c$.$ the use of only call options.

d$.$ All of the above.

e$.$ None of the above.

QUESTION $14$

A straddle is a combination of a put and call on

a$.$ the same stock, with the same strike price and expiration date.

b$.$ different stocks, with the same strike price and expiration date.

c$.$ different stocks, with different strike price and expirations dates.

d$.$ the same stock, with the same the strike price and different expiration dates.

QUESTION $16$

An interest rate futures contract represents a bet or hedge on

a$.$ the direction of future interest rates.

b$.$ the direction of future bond prices.

c$.$ the expectation of future interest rates.

d$.$ None of the above

e$.$ All of the above