1. What is an option?

   	a.	a contract giving the right to buy or sell a stock at a certain price by a certain date
   	b.	a contract that says you will buy or sell a stock at a certain price on a certain date
   	c.	a contract that lets you buy or sell a stock at the current price at a later date
   	d.	a contract that lets you buy or sell a stock at the market price outside market hours

0.2 points

QUESTION 2

1. Which of the following is not a common reason to trade options?

   	a.	to gain leverage through option multipliers
   	b.	to execute different strategies based on how you think the stock price will move
   	c.	to hedge against potential losses
   	d.	to have a less risky portfolio with stable assets

0.2 points

QUESTION 3

1. If you write a put option, your profit goes up as...

   	a.	the stock's price goes up.
   	b.	the stock's price goes down.
   	c.	the call option's price goes up.
   	d.	the stock's volume goes up.

0.2 points

QUESTION 4

1. When and why should you have a long put?

   	a.	You expect the stock price to go below a specific price, but would also like to collect a premium.
   	b.	You expect the stock price to go above a specific price, but would also like to collect a premium.
   	c.	You expect the stock price to go below a specific price, but would also like to have a cushion of protection.
   	d.	You expect the stock price to go above a specific price, but would also like to have a cushion of protection.

0.2 points

QUESTION 5

1. When and why would you have a short put?

   	a.	you are not interested in collecting a premium
   	b.	you are interested in collecting the premium and exercising your right
   	c.	you expect the strike price to remain above the stock price
   	d.	you expect the stock price to remain above the strike price