Series 7 practice questionmediumOptions Calculations 29
An investor buys 1 XYZ 60 put at 5. What is the breakeven point at expiration?
- A$65
- B$55✓ Correct answer
- C$5
- D$53
Explanation
Why B — $55
A long put breaks even at the strike price minus the premium paid: 60 - 5 = 55. The put gains intrinsic value as the stock falls below that point.
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