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Finra Exam Series-7 Topic 6 Question 100 Discussion

Actual exam question for Finra's Series-7 exam
Question #: 100
Topic #: 6
[All Series-7 Questions]

Bubba is long spot Canadian dollars at 0.7400. If he wants to buy one put option on Canadian dollars with a strike price of 74 and a cost of $0.35, what is Bubba's breakeven price for Canadian dollars?

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Suggested Answer: D

0.7435. The put protects against a decline in the exchange rate for Canadian dollars. However, the cost of the put raises the breakeven point to 0.7435 (0.7400 + 0.0035).


Contribute your Thoughts:

Roxane
2 months ago
Wait, Bubba? Who names their kid Bubba these days? Must be a real 'murican if he's trading Canadian dollars.
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Brandee
1 months ago
C: Interesting choice to trade Canadian dollars for Bubba.
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Sharita
1 months ago
B: That's correct. He needs the spot rate to rise above that to profit.
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Frank
1 months ago
A: Bubba's breakeven price is 0.7435.
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Ryan
2 months ago
You guys are overthinking this. The answer is clearly A. 0.4900. Bubba's a real pro, he knows what he's doing.
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Vashti
1 months ago
I'm with you, A) 0.4900 seems right. Bubba knows his stuff.
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Mitsue
1 months ago
No way, it's definitely A) 0.4900. Bubba's got this.
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Ruth
1 months ago
Are you sure about that? I think it's C) 0.7400.
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Phillip
2 months ago
A) 0.4900
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Merlyn
2 months ago
I'm not sure, but I think the breakeven price is calculated by subtracting the cost of the put option from the strike price. So, the answer might be D) 0.7435.
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Dana
2 months ago
Hold up, this is too easy. The answer has to be C. 0.7400. That's the original spot price, duh.
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Shayne
2 months ago
Nah, I'm going with B. 0.7365. Gotta love those fancy options trades, am I right?
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Yen
1 months ago
Good choice with option B!
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Lindsey
1 months ago
Options trading can be exciting!
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Felicitas
2 months ago
Bubba's breakeven price for Canadian dollars is 0.7365.
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Jeanice
3 months ago
I disagree, I believe the answer is D) 0.7435.
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Mary
3 months ago
I think the answer is B) 0.7365.
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Marya
3 months ago
I think the answer is D. 0.7435. The breakeven price for Bubba would be the strike price plus the cost of the put option.
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Samira
2 months ago
Yes, you are correct. The breakeven price for Bubba would be the strike price plus the cost of the put option.
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Veda
3 months ago
I believe the answer is D. 0.7435.
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