Suppose you purchase one WFM May 100 call contract at $5 and write one WFM May 105 call contract at $2. What is the lowest stock price at which you can break even?
A)$101
B)$102
C)$103
D)$104

Question

Quizplus · Accepted Answer

The break-even point for a bull call spread can be calculated by adding the cost of the trade (i.e. buying the lower strike call and selling the higher strike call) to the lower strike price. 
In this case, the cost of the trade is $5 - $2 = $3. 
So the break-even point is $100 + $3 = $103. 
Thus, choice C is the correct answer.

Suppose You Purchase One WFM May 100 Call Contract at $5