Series 7 practice questionmediumOptions Calculations 19
An investor buys 1 XYZ 50 put at 5. What is the breakeven point at expiration?
- A$55
- B$5
- C$43
- D$45✓ Correct answer
Explanation
Why D — $45
A long put breaks even at the strike price minus the premium paid: 50 - 5 = 45. The put gains intrinsic value as the stock falls below that point.
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