Answered

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an investor purchases a long call at a price of $2.80. the strike price at expiration is $41. if the current stock price is $41.10, what is the break-even point for the investor? (do not round intermediate calculations. round your final answer to 2 decimal places.)

Sagot :

The Break-even point for the investor will be equal to $43.80.

The call option allows the entity to buy any stock while the put option allows any entity to sell any stock. The Break even points for both the call and put options are different. If we need to find the Break even point for the call option then the price of the call is added to the strike price and when we need to find the Break even point for put option then the price of the call is subtracted from the strike price. According to the question it is the call option and

Price of call = $2.80

Strike price = $41

Break even point = Price of call + Strike price

Break even point = $2.80 + $41

Break even point = $43.80

Learn more about Break even point at:

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