Finra Exam Series-7 Topic 7 Question 28 Discussion

Actual exam question for Finra's Series-7 exam

Question #: 28
Topic #: 7

At the time it underlying stock is trading at 48, Bubba buys a listed call option with a $50 strike price for $300. At what minimum price must that stock trade for Bubba to recover his investment (ignoring commission and taxes)?

A$45

B$48

C$51

D$53

Show Suggested Answer

Suggested Answer: D

$53. The breakeven price on the call is the premium plus the strike price. Since the premium is $3 per share, the breakeven price is $53.

by Olive at May 03, 2022, 08:55 PM

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