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