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NEW QUESTION: 1
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
Answer: A
Explanation:
Explanation/Reference:
Explanation: a $600 capital loss. The amount of premium paid is the cost and the recovery is zero, resulting in a $600 capital loss.

NEW QUESTION: 2
Security audit reviews should PRIMARILY:
A. ensure controls are technologically current.
B. focus on preventive controls.
C. ensure that controls are cost-effective.
D. ensure that controls operate as required.
Answer: D
Explanation:
The primary objective of a security review or audit should be to provide assurance on the adequacy of security controls. Reviews should focus on all forms of control, not just on preventive control. Cost-effectiveness and technological currency are important but not as critical.

NEW QUESTION: 3

A. Option A
B. Option C
C. Option D
D. Option B
Answer: A

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