Question 1

Use the following soybean futures quotes:
 
-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 ________.

Accepted Answer

A)   $255,350; $265,500
B)   $255,350; $265,020
C)   $257,440; $265,500
D)   $257,440; $265,020
E)   $257,440; $265,520F) A) and C)
G) B) and D)

Question 2

A $1,000 face value bond has a 6.85 percent semi-annual coupon and sells for $980.00.What is the current yield?

Accepted Answer

A)   6.75 percent
B)   6.82 percent
C)   6.89 percent
D)   6.99 percent
E)   6.61 percentF) D) and E)
G) B) and D)

Question 3

Harvest Fields sold ten September futures contracts on oats.Harvest Fields will:

Accepted Answer

A)   pay for the oats in September.
B)   take delivery of the oats in September.
C)   pay for the oats now and take delivery in September.
D)   receive payment now and deliver in September.
E)   both receive payment and deliver in September.F) All of the above
G) B) and D)

Question 4

A contract that grants its buyer the right,but not the obligation,to sell an asset at a specified price is called a:

Accepted Answer

A)   futures contract.
B)   call option.
C)   preset contract.
D)   put option.
E)   primary contract.F) C) and D)
G) B) and E)

Question 5

Preferred stock:

Accepted Answer

A)   represents the residual ownership of a corporation.
B)   is generally issued only by new firms that are small in size.
C)   has a fixed maturity date similar to a bond.
D)   dividends can be skipped at the discretion of the company president.
E)   may or may not be cumulative.F) A) and E)
G) C) and D)

Question 6

Investing in a futures contract:

Accepted Answer

A)   guarantees a sale but not a sale price.
B)   can be profitable for both the buyer and the seller simultaneously.
C)   guarantees the buyer a profit on the contract.
D)   creates a gain for one party without causing a loss for the other party.
E)   can be offset by taking an opposing position.F) C) and E)
G) B) and E)

Question 7

Use the following soybean futures quotes:
 
-You own one futures contract on gold that you purchased at a quoted price of 1,448.5.The current price quote is 1608.8.The contract size is 100 ounces and the quotes are expressed in dollars and cents per ounce.What is your current profit or loss on this investment?

Accepted Answer

A)   $160.30
B)   $1,912.00
C)   $8,040.00
D)   $16,030.00
E)   $19,120.00F) C) and D)
G) A) and E)

Question 8

Use these option quotes to answer this question:
 
-The price you will pay (per underlying share) to buy the 50 call option on JL stock is:

Accepted Answer

A)   $4.75.
B)   $4.80.
C)   $5.00.
D)   $5.90.
E)   $6.00.F) B) and D)
G) A) and B)

Question 9

Use the following soybean futures quotes to answer this question:
 
-What was the total price fluctuation on one September 08 soybeans contract today?

Accepted Answer

A)   $1,337.50
B)   $1,362.50
C)   $1,412.50
D)   $1,460.00
E)   $1,482.50F) B) and D)
G) A) and B)

Question 10

You own 300 shares of stock which you would like to have the right to sell at $40 a share.The 40 call option is quoted at $0.35 bid,$0.40 ask.The 40 put is quoted at $0.45 bid,$0.50 ask.How much will it cost you to obtain the right to sell all of your shares at $40 a share?

Accepted Answer

A)   $135
B)   $50
C)   $150
D)   $105
E)   $75F) A) and E)
G) C) and D)

Question 11

You purchased four put option contracts with a strike price of $35 and a premium of $0.80.What is the total net amount you will receive for your shares if you exercise this contract when the underlying stock is selling for $31.50 a share?

Accepted Answer

A)   $13,680
B)   $14,700
C)   $15,740
D)   $16,340
E)   $16,400F) All of the above
G) A) and C)

Question 12

Use the following bond quotes to answer this question:
 
-The Alpha Industrial bonds pay an annual interest payment equal to 5.875 percent of:

Accepted Answer

A)   $999.90.
B)   $1,000.00.
C)   $1,000.13.
D)   $1,033.54.
E)   $1,034.07.F) A) and E)
G) A) and D)

Question 13

A 3.5 percent coupon bond is currently quoted at 91.3 and has a face value of $1,000.What is the amount of each semi-annual coupon payment if you own three (3) of these bonds?

Accepted Answer

A)   $52.50
B)   $75.00
C)   $100.46
D)   $110.00
E)   $200.93F) C) and D)
G) A) and B)

Question 14

Use the following bond quotes to answer this question:
 
-What is the current price of a $1,000 face value Alpha Industrial bond?

Accepted Answer

A)   $986.67
B)   $991.04
C)   $994.02
D)   $998.23
E)   $1,000.00F) A) and E)
G) B) and D)

Question 15

Preferred stock:

Accepted Answer

A)   is a type of corporate debt.
B)   is treated like debt for tax purposes.
C)   is listed in the liabilities section of a balance sheet.
D)   has a stated dividend but no stated liquidation value.
E)   is treated like equity for both tax and accounting purposes.F) A) and B)
G) None of the above

Question 16

Use the following soybean futures quotes to answer this question.
 
-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?

Accepted Answer

A)   -$3,100.00
B)   -$2,625.00
C)   -$31.00
D)   $987.50
E)   $3,350.00F) A) and B)
G) A) and C)

Question 17

Use the following bond quotes to answer this question:
 
-If you purchase five Zeus bonds,the cost will be ________ and the annual interest income will be ________.

Accepted Answer

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; $460.00F) A) and E)
G) All of the above

Question 18

An agreement that grants the owner the right,but not the obligation,to buy or sell a specific asset at a specified price during a specified time period is called a(n) ________ contract.

Accepted Answer

A)   futures
B)   obligatory
C)   quoted
D)   fixed
E)   optionF) A) and E)
G) A) and B)

Question 19

Use the following stock quotes to answer this question:
 
-What was the previous day's closing price for Baker Co.stock?

Accepted Answer

A)   $44.70
B)   $54.10
C)   $68.20
D)   $78.10
E)   $80.40F) A) and E)
G) A) and D)

Question 20

You will earn a profit as the owner of a call option if the price of the underlying asset:

Accepted Answer

A)   decreases.
B)   remains constant or decreases.
C)   remains constant.
D)   remains constant or increases.
E)   increases.F) C) and E)
G) C) and D)

Exam 3: Overview of Security Types

Correct Answer
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Use the following soybean futures quotes to answer this question. -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?

Correct Answer
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Use the following bond quotes to answer this question: -What is the current price of a $1,000 face value Alpha Industrial bond?

Correct Answer
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You will earn a profit as the owner of a call option if the price of the underlying asset:

Correct Answer
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You purchased four put option contracts with a strike price of $35 and a premium of $0.80.What is the total net amount you will receive for your shares if you exercise this contract when the underlying stock is selling for $31.50 a share?

Correct Answer
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Investing in a futures contract:

Correct Answer
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A contract that grants its buyer the right,but not the obligation,to sell an asset at a specified price is called a:

Correct Answer
verified

An agreement that grants the owner the right,but not the obligation,to buy or sell a specific asset at a specified price during a specified time period is called a(n) ________ contract.

Correct Answer
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Preferred stock:

Correct Answer
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A 3.5 percent coupon bond is currently quoted at 91.3 and has a face value of $1,000.What is the amount of each semi-annual coupon payment if you own three (3) of these bonds?

Correct Answer
verified

Harvest Fields sold ten September futures contracts on oats.Harvest Fields will:

Correct Answer
verified

Use these option quotes to answer this question: -The price you will pay (per underlying share) to buy the 50 call option on JL stock is:

Correct Answer
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Use the following bond quotes to answer this question: -The Alpha Industrial bonds pay an annual interest payment equal to 5.875 percent of:

Correct Answer
verified

Use the following bond quotes to answer this question: -If you purchase five Zeus bonds,the cost will be and the annual interest income will be .

Correct Answer
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Preferred stock:

Correct Answer
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A $1,000 face value bond has a 6.85 percent semi-annual coupon and sells for $980.00.What is the current yield?

Correct Answer
verified

Use the following soybean futures quotes to answer this question: -What was the total price fluctuation on one September 08 soybeans contract today?

Correct Answer
verified

You own 300 shares of stock which you would like to have the right to sell at $40 a share.The 40 call option is quoted at $0.35 bid,$0.40 ask.The 40 put is quoted at $0.45 bid,$0.50 ask.How much will it cost you to obtain the right to sell all of your shares at $40 a share?

Correct Answer
verified

Use the following stock quotes to answer this question: -What was the previous day's closing price for Baker Co.stock?

Correct Answer
verified

Use the following soybean futures quotes: -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 .

Correct Answer
verified

Exam 3: Overview of Security Types

Correct AnswerverifiedShow Answer

Use the following soybean futures quotes to answer this question. -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?

Correct AnswerverifiedShow Answer

Use the following bond quotes to answer this question: -What is the current price of a $1,000 face value Alpha Industrial bond?

Correct AnswerverifiedShow Answer

You will earn a profit as the owner of a call option if the price of the underlying asset:

Correct AnswerverifiedShow Answer

You purchased four put option contracts with a strike price of $35 and a premium of $0.80.What is the total net amount you will receive for your shares if you exercise this contract when the underlying stock is selling for $31.50 a share?

Correct AnswerverifiedShow Answer

Investing in a futures contract:

Correct AnswerverifiedShow Answer

A contract that grants its buyer the right,but not the obligation,to sell an asset at a specified price is called a:

Correct AnswerverifiedShow Answer

An agreement that grants the owner the right,but not the obligation,to buy or sell a specific asset at a specified price during a specified time period is called a(n) ________ contract.

Correct AnswerverifiedShow Answer

Preferred stock:

Correct AnswerverifiedShow Answer

A 3.5 percent coupon bond is currently quoted at 91.3 and has a face value of $1,000.What is the amount of each semi-annual coupon payment if you own three (3) of these bonds?

Correct AnswerverifiedShow Answer

Harvest Fields sold ten September futures contracts on oats.Harvest Fields will:

Correct AnswerverifiedShow Answer

Use these option quotes to answer this question: -The price you will pay (per underlying share) to buy the 50 call option on JL stock is:

Correct AnswerverifiedShow Answer

Use the following bond quotes to answer this question: -The Alpha Industrial bonds pay an annual interest payment equal to 5.875 percent of:

Correct AnswerverifiedShow Answer

Use the following bond quotes to answer this question: -If you purchase five Zeus bonds,the cost will be ________ and the annual interest income will be ________.

Correct AnswerverifiedShow Answer

Preferred stock:

Correct AnswerverifiedShow Answer

A $1,000 face value bond has a 6.85 percent semi-annual coupon and sells for $980.00.What is the current yield?

Correct AnswerverifiedShow Answer

Use the following soybean futures quotes to answer this question: -What was the total price fluctuation on one September 08 soybeans contract today?

Correct AnswerverifiedShow Answer

You own 300 shares of stock which you would like to have the right to sell at $40 a share.The 40 call option is quoted at $0.35 bid,$0.40 ask.The 40 put is quoted at $0.45 bid,$0.50 ask.How much will it cost you to obtain the right to sell all of your shares at $40 a share?

Correct AnswerverifiedShow Answer

Use the following stock quotes to answer this question: -What was the previous day's closing price for Baker Co.stock?

Correct AnswerverifiedShow Answer

Use the following soybean futures quotes: -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 ________.

Correct AnswerverifiedShow Answer

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Use the following bond quotes to answer this question: -If you purchase five Zeus bonds,the cost will be and the annual interest income will be .

Correct Answer
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Correct Answer
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Use the following soybean futures quotes: -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 .

Correct Answer
verified