1- An investor purchased an S&P 100 (OEX) July 720 Call @ 6.50. He exercises the option when the index is at 731.26. The investor has a:

a. $4.76 gain

b. $4.76 loss

c. $476.00 gain

d. $476.00 loss

2. Which of the following choices is the most beneficial tax consequence to an individual when computing his federal tax liability?

a. Depreciation

b. Depletion

c. Recapture

d. Tax credits

3. In August, an investor sells an uncovered listed option and receives a $600 premium. The following February, the customer makes a closing purchase transaction at 5. The result of the transaction is:

a. A capital gain of $100

b. Ordinary income of $100

c. A capital loss of $100

d. Not taxable

4. - When determining position and exercise limits for a listed equity option, which TWO of the following positions are considered to be on the same side of the market?

I. Long calls and long puts

II. Long calls and short puts

III. Short calls and short puts

IV. Short calls and long puts

a. I and III

b. I and IV

c. II and III

d. II and IV

5- A limited partnership investing in raw land would be MOST interested in:

a. Depreciation deductions

b. Consistent income from land

c. Capital gains due to appreciation

d. Depletion allowance

6- An individual wants to buy an interest in an oil and gas limited partnership that has the LEAST amount of risk. The MOST suitable recommendation would be a(n):

a. Income program

b. Exploratory program

c. Drilling program

d. Balanced program

7. A registered representative is required to certify which TWO of the following choices when a customer is purchasing a limited partnership?

I. That the customer has been advised by an accountant

II. That the customer is in a financial position to be investing in this type of product

III. That the customer has a sufficient net worth to lose his entire investment

IV. That the customer will not be investing in this type of product for a retirement account

a. I and III

b. I and IV

c. II and III

d. II and IV