Question

Break-even point for call: An investor purchases a long call at a price of $3.45. The strike price at expiration is $54. If the current stock price is $54.10, what is the break-even point for the investor?

A. $57.55
B. $50.55
C. $57.45
D. $54.00

Answer 1

C. $57.45

Step-by-step explanation:

Calculation for the break-even point for the investor

Using this formula

Break-even point price = Strike price + Cost incurred

Let plug in the formula

Break-even point price=$54+3.45

Break-even point price=$57.45

Therefore the Break-even point price will be $57.45