STC Series 7 Progress Exam 3A 2025
With 100% Correct Answers
Which of the following statements is TRUE regarding REITs? - CORRECT ANSWER✔✔Their
shares may be traded on an exchange.
Which of the following choices is included in a subscription agreement for a direct participation
program (DPP)? - CORRECT ANSWER✔✔A statement that attests to the investor's ability to
meet the financial requirements of this investment.
A customer writes an IBM October 120 call and receives a $4 premium and buys an IBM
October 100 call and pays a $12 premium. IBM is currently selling at $108. Assume the
customer later sells the IBM October 100 call for $20. The IBM October 120 call, which he
initially sold expires. The customer will realize a: - CORRECT ANSWER✔✔$1200 profit
The most significant factor affecting the net asset value of a mutual fund on a day-to-day basis
is: - CORRECT ANSWER✔✔The market value of the portfolio
Which of the following option positions obligates the investor to sell shares if exercised against?
- CORRECT ANSWER✔✔Short a call
A customer is considering writing an XYZ June 70 call for a $4 premium but is concerned about
the risk of an unlimited loss. Which of the following positions, when added, provides the BEST
protection? - CORRECT ANSWER✔✔Buying an XYZ June 75 call for a premium of 1
The short call position has unlimited risk since there is no limit to where the underlying stock
can increase to. If, however, in addition, the customer buys an XYZ June 75 call for 1, it creates a
credit spread. The maximum risk is reduced to $200, which is the difference between the strike
prices 5 (75 - 70) and the net premium received 3 .
With 100% Correct Answers
Which of the following statements is TRUE regarding REITs? - CORRECT ANSWER✔✔Their
shares may be traded on an exchange.
Which of the following choices is included in a subscription agreement for a direct participation
program (DPP)? - CORRECT ANSWER✔✔A statement that attests to the investor's ability to
meet the financial requirements of this investment.
A customer writes an IBM October 120 call and receives a $4 premium and buys an IBM
October 100 call and pays a $12 premium. IBM is currently selling at $108. Assume the
customer later sells the IBM October 100 call for $20. The IBM October 120 call, which he
initially sold expires. The customer will realize a: - CORRECT ANSWER✔✔$1200 profit
The most significant factor affecting the net asset value of a mutual fund on a day-to-day basis
is: - CORRECT ANSWER✔✔The market value of the portfolio
Which of the following option positions obligates the investor to sell shares if exercised against?
- CORRECT ANSWER✔✔Short a call
A customer is considering writing an XYZ June 70 call for a $4 premium but is concerned about
the risk of an unlimited loss. Which of the following positions, when added, provides the BEST
protection? - CORRECT ANSWER✔✔Buying an XYZ June 75 call for a premium of 1
The short call position has unlimited risk since there is no limit to where the underlying stock
can increase to. If, however, in addition, the customer buys an XYZ June 75 call for 1, it creates a
credit spread. The maximum risk is reduced to $200, which is the difference between the strike
prices 5 (75 - 70) and the net premium received 3 .
