1- If you Write a Put option, your profit goes up as… A. The stock\'s price goes
ID: 2811818 • Letter: 1
Question
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
2- 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
3- 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 market price at a later date
D. A contract that lets you buy a stock at the market price outside market hours
4-How can you find your historical portfolio value?
A. Your Dashboard Page
B. Your Transaction History Page
C. Your Account Balances Page
D. Your Open Positions Page
5- What kind of graph is best for seeing your portfolio value over time?
A. Line Graph
B. Bar Graph
C. Pie Chart
D. Scatter Chart
6- Where can you change how a chart's colors and legend appears?
A. "Page Layout" on the top menu
B. Right-Click the chart and click "Select Data"
C. "Design" on the top menu
D. Right-Click the chart and click "Format"
Explanation / Answer
1)
Writer of put option is under an obligation to buy the underlying stock at the strike price of the option purchased by the buyer of put option. If the stock price increases, buyer of put option will not exercise the option. As he can sell in market at a high price.
Hence, correct option is A. The stock's price goes up.
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