What is the breakeven stock price at expiration for the transaction described in problem 6?
A) $27.11
B) $30.00
C) $32.89
D) $29.89
E) none of the above

Question

What is the breakeven stock price at expiration for the transaction described in problem 6?
A) $27.11
B) $30.00
C) $32.89 
D) $29.89
E) none of the above

Quizplus · Accepted Answer

The breakeven stock price at expiration is the stock price at which the investor will neither make a profit nor a loss on the transaction. In this case, the breakeven stock price is $27.11. This is because the investor will receive $30.00 from the sale of the stock, but will have to pay $2.89 in commissions.

What Is the Breakeven Stock Price at Expiration for the Transaction