Finra Series-7 Exam - 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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Garry

7 months ago

I’m not convinced, seems high for just a $2 move.

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Micah

7 months ago

Yup, $53 is right. Gotta cover that option cost!

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Aja

7 months ago

Wait, are you sure? I thought it was lower than that.

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Jackie

7 months ago

Totally agree, $53 makes sense with that premium.

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Lorriane

8 months ago

He needs the stock to hit $53 to break even.

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Tawna

8 months ago

I practiced a similar question, and I think the minimum price should be $53 to break even.

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Ciara

8 months ago

I’m not entirely sure, but I remember something about needing to cover the cost of the option. Could it be $51?

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Marion

8 months ago

I think the stock needs to be above the strike price plus the premium paid, so maybe around $53?

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Galen

8 months ago

I’m a bit confused; I thought it was just the strike price, but now I’m not so sure. Is it $51 or $53?

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Romana

8 months ago

Okay, I've got it! The answer is D, Base Template. All Sitecore templates inherit from the Base Template.

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Alaine

8 months ago

I'm not completely sure, but I think if you select the internal identity source, it might just redirect there instead of the external store?

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Marylou

8 months ago

Hmm, this seems like a tricky one. I'll need to think carefully about the differences between YANG-push and OpenConfig to figure out the right dampening period setting.

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