Russ paid a total of $125 to purchase 10 call options with a strike price of $23.50. What is the break-even stock price?
A)$12.50
B)$17.65
C)$23.63
D)$25.00
E)$236.30

Question

Quizplus · Accepted Answer

The break-even point can be calculated by adding the strike price to the premium paid per share. 
Premium paid per share = Total premium/Number of shares = $125/10 = $12.50 
Break-even stock price = Strike price + Premium paid per share = $23.50 + $12.50 = $36 
So the break-even stock price is $23.63 (closest option is C).

Russ Paid a Total of $125 to Purchase 10 Call