Jeff paid a call premium of $0.25 when he purchased his call option with a strike price of $22.00. What is the break-even stock price?
A) $0.00
B) $0.25
C) $22.25
D) $22.50
E) $22.75

Question

Quizplus · Accepted Answer

The break-even stock price is calculated by adding the strike price and the premium paid.

Break-even stock price = Strike price + Premium paid 
= $22.00 + $0.25 
= $22.25

Therefore, the break-even stock price is $22.25, which is option C.

Jeff Paid a Call Premium of $0