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FINRA Series 7 General Securities Representative Qualification Examination (GS) Series-7 Question # 35 Topic 4 Discussion

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FINRA Series 7 General Securities Representative Qualification Examination (GS) Series-7 Question # 35 Topic 4 Discussion

Series-7 Exam Topic 4 Question 35 Discussion:
Question #: 35
Topic #: 4

In June, Bubba bought 100 shares of XYZ at $35. In November, he bought a listed put in XYZ with a $35 strike price and a July expiration for a premium of $600.

If the option expires without being exercised, how is the premium expense treated by Bubba?
A.

as a $600 capital loss

B.

as a $600 capital gain

C.

$600 is added to his acquisition cost for the stock

D.

$600 is held in abeyance until the stock is eventually sold

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Actual exam question for FINRA Series-7 exam by Draven66189 at Aug 3, 2025, 12:00:00 AM

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