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ICMA FMFQ Exam - Topic 5 Question 20 Discussion

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

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?

Suggested Answer: C

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12 comments · newest first
NI
Nida 1 year ago
I thought it would be lower, but I guess that’s right!
LO
Lore 1 year ago
Yup, EUR 30.50 makes sense.
AV
Avery 1 year ago
Wait, how is it not EUR 29? That seems off.
NA
Natalie 1 year ago
Totally agree, it's EUR 30.50!
MA
Mayra 1 year ago
Breakeven is strike + premium, so EUR 30.50.
LO
Lorriane 1 year 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.
ST
Stephane 1 year 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.
JU
Julieta 1 year ago
I remember something about adding the premium to the strike price, but I'm not completely sure if I got the numbers right.
BE
Bernadine 1 year ago
I think the breakeven price is the strike price plus the premium, so maybe EUR 30.50?
EL
Elvis 1 year 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.
JO
Jolene 1 year 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.
HE
Hermila 1 year 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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