The premium on a euro call option is $.02. The exercise price is $1.32. The break-even point is ____ for the buyer of the call, and ____ for the seller of the call. (Assume zero transactions costs and that the buyer and seller of the put option are speculators.)
A) $1.30; $1.30
B) $1.34; $1.30
C) $1.30; $1.34
D) $1.34; $1.34

Question

Quizplus · Accepted Answer

Break-even point on call option to both the buyer and seller is $1.32 + $.02 = $1.34.

The Premium on a Euro Call Option Is