At what point on the graph of possible values for a call option does the buyer break even financially?
A) When the stock price equals the strike price
B) At any point on the upward-sloping segment of the graph
C) When the stock price equals the cost of the option plus the strike price
D)At the point where the graph intercepts the y-axis

Question

Quizplus · Accepted Answer

The buyer of a call option breaks even when the stock price equals the cost of the option plus the strike price. This is because the buyer recovers the premium paid for the option through the intrinsic value gained from the difference between the stock's market price and the strike price.

At What Point on the Graph of Possible Values for a Call