Series 7 practice questionmediumOptions Calculations 23
An investor writes 1 uncovered XYZ 70 call at 4. What is the maximum possible gain?
- Aunlimited
- B$74
- C$7000
- D$400✓ Correct answer
Explanation
Why D — $400
The most an uncovered call writer can earn is the premium received. With a premium of 4, the maximum gain is 4 x 100 = $400.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 755+ Series 7 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Investment Information & Recommendations questions
- An investor buys 1 XYZ 75 put at 5. What is the breakeven point at expiration?
- An investor buys 1 XYZ 65 call at 3. What is the maximum possible loss?
- An investor writes 1 cash-secured XYZ 40 put at 6. What is the breakeven point at expiration?
- An investor buys 1 XYZ 60 call at 2. What is the breakeven point at expiration?