Series 7 practice questionmediumOptions Calculations 24
An investor buys 1 XYZ 75 put at 5. What is the breakeven point at expiration?
- A$70✓ Correct answer
- B$80
- C$5
- D$68
Explanation
Why A — $70
A long put breaks even at the strike price minus the premium paid: 75 - 5 = 70. The put gains intrinsic value as the stock falls below that point.
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