Series 7 practice questionmediumOptions Calculations 26
An investor buys 1 XYZ 45 call at 2. What is the breakeven point at expiration?
- A$43
- B$49
- C$47✓ Correct answer
- D$2
Explanation
Why C — $47
A long call breaks even at the strike price plus the premium paid: 45 + 2 = 47. Below that price at expiration, the premium is not fully recovered.
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