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Finra Series-7 Exam - Topic 7 Question 28 Discussion

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)?
D) $53
A) $45
B) $48
C) $51

Finra Series-7 Exam - Topic 7 Question 28 Discussion

Actual exam question for Finra's Series-7 exam
Question #: 28
Topic #: 7
[All Series-7 Questions]

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)?

Show Suggested Answer Hide 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
8 months ago
I’m not convinced, seems high for just a $2 move.
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Micah
9 months ago
Yup, $53 is right. Gotta cover that option cost!
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Aja
9 months ago
Wait, are you sure? I thought it was lower than that.
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Jackie
9 months ago
Totally agree, $53 makes sense with that premium.
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Lorriane
9 months ago
He needs the stock to hit $53 to break even.
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Tawna
9 months ago
I practiced a similar question, and I think the minimum price should be $53 to break even.
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Ciara
9 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
9 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
9 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
9 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
10 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
10 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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