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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)?
Suggested Answer: D
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$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.
12 comments · newest first
GA
Garry
1 year ago
I’m not convinced, seems high for just a $2 move.
MI
Micah
1 year ago
Yup, $53 is right. Gotta cover that option cost!
AJ
Aja
1 year ago
Wait, are you sure? I thought it was lower than that.
JA
Jackie
1 year ago
Totally agree, $53 makes sense with that premium.
LO
Lorriane
1 year ago
He needs the stock to hit $53 to break even.
TA
Tawna
1 year ago
I practiced a similar question, and I think the minimum price should be $53 to break even.
CI
Ciara
1 year ago
I’m not entirely sure, but I remember something about needing to cover the cost of the option. Could it be $51?
MA
Marion
1 year ago
I think the stock needs to be above the strike price plus the premium paid, so maybe around $53?
GA
Galen
1 year 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?
RO
Romana
1 year ago
Okay, I've got it! The answer is D, Base Template. All Sitecore templates inherit from the Base Template.
AL
Alaine
1 year 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?
MA
Marylou
1 year 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.