Series 7 Exam Question 102: Answer and Explanation

Question: 102

The Option Clearing Corporation sets all of the following with regard to an option contract EXCEPT the

• A. premium
• B. contract size
• C. strike price
• D. expiration date

Correct Answer: A

Explanation:

A. The Option Clearing Corporation (OCC) sets the strike price, contract size, and expiration date for each listed option. The premium of an option is based on the market price of the security, the expiration date, and market sentiment.