Jasmine Purchased One Call Option with a Strike Price of $35

question 71

Multiple Choice

Jasmine purchased one call option with a strike price of $35 when the call premium was $1.10. What is the break-even stock price?

• A)$0
• B)$33.90
• C)$34.45
• D)$35.00
• E)$36.10

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Definitions:

Output

The total amount of goods or services produced by a company, industry, or economy within a certain period.

Variable Cost

Costs that vary directly with the level of production or output, such as materials and labor directly used in the manufacturing process.

Average Cost

Generally refers to the average total cost, representing the per unit total cost of production, including both fixed and variable costs.

Average Total Cost Curve

A graphical representation showing how the average cost of production changes as the quantity of output is altered.