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ICMA FMFQ Exam - Topic 5 Question 20 Discussion

You have bought a call option on a stock at a strike of EUR 29, and paid a premium of EUR 1.5 for this option. What is your breakeven price on this position?
C) EUR 30.50
A) EUR 27.50
B) EUR 29.00
D) EUR 32.00

ICMA FMFQ Exam - Topic 5 Question 20 Discussion

Actual exam question for ICMA's FMFQ exam
Question #: 20
Topic #: 5
[All FMFQ Questions]

You have bought a call option on a stock at a strike of EUR 29, and paid a premium of EUR 1.5 for this option. What is your breakeven price on this position?

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Suggested Answer: C

by Fausto at May 07, 2022, 06:38 PM

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Nida
8 months ago
I thought it would be lower, but I guess that’s right!
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Lore
8 months ago
Yup, EUR 30.50 makes sense.
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Avery
8 months ago
Wait, how is it not EUR 29? That seems off.
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Natalie
8 months ago
Totally agree, it's EUR 30.50!
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Mayra
8 months ago
Breakeven is strike + premium, so EUR 30.50.
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Lorriane
8 months ago
I feel like it’s EUR 29 plus EUR 1.5, which would make it EUR 30.50, but I might be mixing it up with another question.
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Stephane
8 months ago
I practiced a similar question, and I think the breakeven is definitely above the strike price, but I can't recall the exact calculation.
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Julieta
8 months ago
I remember something about adding the premium to the strike price, but I'm not completely sure if I got the numbers right.
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Bernadine
8 months ago
I think the breakeven price is the strike price plus the premium, so maybe EUR 30.50?
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Elvis
9 months ago
Hmm, this looks like a tricky one. I'll need to think carefully about the components of Huawei's dual-active disaster recovery solution.
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Jolene
9 months ago
I'm pretty confident that the correct answer is D. The question is asking for the command to reset the fishbucket for one source.
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Hermila
9 months ago
I think the key here is to focus on the data usage for each application separately. The Candidate application is maintaining and/or referencing all 86 pieces, so that's a high ILF. And the Hiring application is just referencing 53 pieces, so that's an average EIF.
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