Finra Exam Series-7 Topic 3 Question 14 Discussion

Actual exam question for Finra's Series-7 exam

Question #: 14
Topic #: 3

[All Series-7 Questions]

Bubba held one XYZ July 30 listed call option when XYZ split 2 for 1.

What is the resulting position, Bubba has on the Option Clearing Corporation's record?

Along one XYZ July 30 call

Blong one XYZ July 30 call and short one XYZ July 30 call

Clong two XYZ July 30 calls

Dlong two XYZ July 15 calls

Show Suggested Answer

Suggested Answer: D

long two XYZ July 15 calls. Double the number of contracts and half the strike price. This is similar to XYZ shareholders doubling the number of shares they hold at the lower price.

by Blair at May 06, 2022, 11:32 PM

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