Series 7 Exam Question 99: Answer and Explanation

Question: 99

An investor sells 1 XYZ May 30 put for 7. What is the break-even point?

  • A. 23
  • B. 30
  • C. 37
  • D. Cannot be determined

Correct Answer: A

Explanation:

A. Certainly, "cannot be determined" is not the answer. Whether buying or selling a put option with no other positions, you can determine the break-even point by subtracting the premium from the strike price:

30 - 7 = 23

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