SIE practice questionhardOptions
A customer buys a call option for $5 on a stock currently at $45 with a $50 strike. What is the breakeven price?
- A$40
- B$50
- C$45
- D$55✓ Correct answer
Explanation
Why D — $55
Breakeven for a call is strike plus premium: $50 + $5 = $55. Below this, the buyer loses money.
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