Series 7  General Securities Representative Exam
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NOP stock is trading at 50. An investor buys the 45 put and the 55 call at the same time for 8.00. What is the investor's breakeven point at expiration?
The stock must be below 60 and above 40
A
The stock must be above 60 or below 40
B
The stock must be above 63 or below 37
C
The stock must be below 63 and above 37
D
Explanations
The investor bought a strangle; which is buying a call and put at the same time of different strike prices. To calculate the breakeven, subtract the total premium paid from the put and add the total premium paid to the call. The stock must be above 63 OR below 37 at the time of expiration for the investor to breakeven
Pricing
Basic
Part of the questions for each course

 Course
 Questions

 SIE
 20 of 150

 Series 6
 30 of 500

 Series 7
 50 of 625