Series 7 practice questionmediumOptions Calculations 36
An investor buys 1 XYZ 55 call at 2. What is the breakeven point at expiration?
- A$57✓ Correct answer
- B$53
- C$59
- D$2
Explanation
Why A — $57
A long call breaks even at the strike price plus the premium paid: 55 + 2 = 57. Below that price at expiration, the premium is not fully recovered.
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