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SIE: Options
SIE practice questionmediumBreakeven points

A put option has a strike price of $60 and a premium of $4. What is the breakeven price for the buyer?

  1. A$64
  2. B$60
  3. C$56✓ Correct answer
  4. D$4
Explanation

Why C$56

Put breakeven is strike price minus the premium ($60 - $4 = $56). Adding the premium applies to calls, not puts, and the other options do not reflect the correct formula.

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