Series 7 practice questionmediumOptions Calculations 16
An investor buys 1 XYZ 75 call at 2. What is the breakeven point at expiration?
- A$77✓ Correct answer
- B$73
- C$79
- D$2
Explanation
Why A — $77
A long call breaks even at the strike price plus the premium paid: 75 + 2 = 77. Below that price at expiration, the premium is not fully recovered.
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