I have difficulty to get it 100 % right. Who can help?Question...

I have difficulty to get it 100 % right. Who can help?

Question 1

You currently hold the following option position:

Short 20 BHP $25 calls expiring in June.
The share price of BHP rises from $25 to $26.

Which of the following statements is correct?

a) the cash / stock margin required for this position will increase
b) the cash / stock margin required for the position will decrease
c) the cash / stock margin required for this position will be the same
d) no margins apply to this position
Question 2.
Question 2

You undertake the following trade:

Sell 10 LHG $2.50 calls for June @ 10c

At the end of June, LHG is trading at $2.75 and you are assigned on your short position.
What is your total profit / loss per share if you buy the shares at market price (excluding brokerage and ACH charges)?

a) 25c loss
b) 15c loss
c) $2.50 loss
d) 35c profit
Question 3.
Question 3

You enter the following strategy:

Buy 5 TLS 350 calls for May @ 25c
Sell 5 TLS 375 calls for May @ 10c

What is the settlement amount (eg how much will it cost) required for this strategy, excluding brokerage and ACH charges (assuming 1000 shares per contract)

a) $250
b) $2500
c) $150
d) $750
Question 4.
Question 4

All else remaining constant an increase in volatility leads to:

a) Lower option premiums
b) Higher option premiums
c) Flat option premiums
d) None of the above
Question 5.
Question 5

To buy an index option with a premium of 100 points an investor would pay? (excluding brokerage and ACH charges).

a) $100
b) $1,000
c) $1,100
d) $2,000
Question 6.
Question 6

You hold the following positions :

Long 5 BHP $25.00 puts for June
Short 5 BHP $25.50 puts for March

The market price for BHP is $24.00 and if you are assigned on the short leg of this strategy you will be required to:

a) Buy BHP @ $25.50
b) Sell BHP @ $25.50
c) Buy BHP @ $25.00
d) Sell BHP @ $25.00
Question 7.
Question 7

You write a XYZ $80.00 call option for a price of $3.25. If you are assigned what is the net price (excluding brokerage and ACH charges) you will receive per share for the 1000 shares of XYZ stock.

a) $76.75
b) $80.00
c) $83.25
d) $3.25
Question 8.
Question 8

One reason to write a put is to:

a) Protect your portfolio from a drop in value
b) Reduce the purchase price of the underlying stock
c) Establish a price range for an offsetting contract to close out your position
d) All of the above
Question 9.
Question 9

If you are assigned on a short call and don't hold the stock you should:

a) Substitute cash for stock
b) Purchase the stock immediately after you are notified of assignment
c) Make arrangements to purchase the stock the following week
d) Do nothing
Question 10.
Question 10

If additional margin is needed to cover a short option trade, Westpac Broking will:

a) Call you to find out which stock or cash you would like us to use to cover the trade
b) Automatically lodge cash or stock on your behalf with the ACH
c) Close out your short position
d) All of the above