Series 7 practice questionmediumOptions Calculations 39
An investor buys 1 XYZ 70 put at 5. What is the breakeven point at expiration?
- A$75
- B$5
- C$63
- D$65✓ Correct answer
Explanation
Why D — $65
A long put breaks even at the strike price minus the premium paid: 70 - 5 = 65. The put gains intrinsic value as the stock falls below that point.
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