FIN501 INVESTMENT ANALYSIS
PRACTICE EXAM QUESTIONS AND
ANSWERS 100% PASS 2026 EDITION
Setter company's stock price is $43. You sold short 3 lots of the stock. The initial margin is 60%
and the
maintenance margin is 40%. What is your equity after this transaction. - ANS $7,740
Abi company is currently trading at $16. There are call and put options with $15 strike price and
3 month
maturity. The company does not pay dividend. The risk free rate is 2.5 percent. Abi has 40
percent
standard deviation. What is the cumulative normal distribution of d1? - ANS 0.6773
Which one of the following statements is correct?
Futures contracts can be closed out only by contract buyers.
Futures contracts must be held to maturity.
You cannot avoid accepting delivery once you purchase a futures contract.
Futures contracts can be closed out by entering a reverse trade. - ANS Futures contracts can
be closed out by entering a reverse trade.
1
@2026 EDITION ALLRIGHTS RESERVED
, The seller of a naked call is betting that the price of the underlying asset will:
will remain constant for a period of time and then increase prior to the expiration date.
decrease or remain constant.
decrease and then increase prior to the expiration date.
increase. - ANS decrease or remain constant.
Abi company is currently trading at $16. There are call and put options with $15 strike price and
3 month
maturity. The company does not pay dividend. The risk free rate is 2.5 percent. Abi has 40
percent
standard deviation. What is d1? - ANS 0.4602
An investor who accepts the risk of a loss in exchange for the chance to earn a profit is referred
to as
which one of the following?
hedger
short seller
broker
speculator - ANS speculator
BCC Inc. buys and repackage and sells oatmeal to supermarkets. The company needs to quote a
price at which it will sell oatmeal to a large supermarket chain next year. It can limit the risk
from an increase in the price of oats next year by
taking long and short positions in oat futures with different expiration dates.
2
@2026 EDITION ALLRIGHTS RESERVED
PRACTICE EXAM QUESTIONS AND
ANSWERS 100% PASS 2026 EDITION
Setter company's stock price is $43. You sold short 3 lots of the stock. The initial margin is 60%
and the
maintenance margin is 40%. What is your equity after this transaction. - ANS $7,740
Abi company is currently trading at $16. There are call and put options with $15 strike price and
3 month
maturity. The company does not pay dividend. The risk free rate is 2.5 percent. Abi has 40
percent
standard deviation. What is the cumulative normal distribution of d1? - ANS 0.6773
Which one of the following statements is correct?
Futures contracts can be closed out only by contract buyers.
Futures contracts must be held to maturity.
You cannot avoid accepting delivery once you purchase a futures contract.
Futures contracts can be closed out by entering a reverse trade. - ANS Futures contracts can
be closed out by entering a reverse trade.
1
@2026 EDITION ALLRIGHTS RESERVED
, The seller of a naked call is betting that the price of the underlying asset will:
will remain constant for a period of time and then increase prior to the expiration date.
decrease or remain constant.
decrease and then increase prior to the expiration date.
increase. - ANS decrease or remain constant.
Abi company is currently trading at $16. There are call and put options with $15 strike price and
3 month
maturity. The company does not pay dividend. The risk free rate is 2.5 percent. Abi has 40
percent
standard deviation. What is d1? - ANS 0.4602
An investor who accepts the risk of a loss in exchange for the chance to earn a profit is referred
to as
which one of the following?
hedger
short seller
broker
speculator - ANS speculator
BCC Inc. buys and repackage and sells oatmeal to supermarkets. The company needs to quote a
price at which it will sell oatmeal to a large supermarket chain next year. It can limit the risk
from an increase in the price of oats next year by
taking long and short positions in oat futures with different expiration dates.
2
@2026 EDITION ALLRIGHTS RESERVED
