You buy one Xerox June 60 call contract and one June 60 put contract.The call premium is $5 and the put premium is $3.At expiration,you break even if the stock price is equal to
A) $52.
B) $60.
C) $68.
D) both a and c.
E) none of these.

Question

Quizplus · Accepted Answer

The break-even points for a straddle (buying both a call and a put at the same strike price) are calculated by adding and subtracting the total premium from the strike price. Here, the total premium is $8 ($5 + $3). Therefore, the break-even points are $60 + $8 = $68 and $60 - $8 = $52.

You Buy One Xerox June 60 Call Contract and One