SIE Securities Industry Essentials Exam Practice Test

Free 5-question sample test with instant feedback. See how ready you are.

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Sample Questions

Question 1

What right does a call option give its buyer?

Answer: A call option gives the buyer the right, but not the obligation, to BUY 100 shares of the underlying security at the strike price before or on the expiration date.

Question 2

What right does a put option give its buyer?

Answer: A put option gives the buyer the right, but not the obligation, to SELL 100 shares of the underlying security at the strike price before or on the expiration date.

Question 3

What is the 'premium' in an options contract?

Answer: The premium is the price paid by the option buyer to the option seller (writer) for the rights conveyed by the contract. It represents the option's total market value.

Question 4

What is the 'strike price' (exercise price) of an option?

Answer: The strike price is the fixed price at which the option holder can buy (call) or sell (put) the underlying security if they choose to exercise the option.

Question 5

How many shares does one standard equity options contract represent?

Answer: One standard equity options contract represents 100 shares of the underlying security.