Series 7 practice questionmediumOptions Calculations 31
An investor buys 1 XYZ 70 call at 2. What is the breakeven point at expiration?
- A$68
- B$74
- C$2
- D$72✓ Correct answer
Explanation
Why D — $72
A long call breaks even at the strike price plus the premium paid: 70 + 2 = 72. Below that price at expiration, the premium is not fully recovered.
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