Series 7 practice questionmediumOptions Calculations 14
An investor buys 1 XYZ 65 put at 5. What is the breakeven point at expiration?
- A$70
- B$5
- C$60✓ Correct answer
- D$58
Explanation
Why C — $60
A long put breaks even at the strike price minus the premium paid: 65 - 5 = 60. The put gains intrinsic value as the stock falls below that point.
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