A One-Year Call Option on a Stock with a Strike

question 1

Multiple Choice

A one-year call option on a stock with a strike price of $30 costs $3; a one-year put option on the stock with a strike price of $30 costs $4.Suppose that a trader buys two call options and one put option.The breakeven stock price below which the trader makes a profit is

• A) $25
• B) $28
• C) $26
• D) $20

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Definitions:

Time Commitment Costs

The expenses associated with the amount of time required to complete a task or project, considering how that time could have been spent on other activities.

Union Suppression

Involves actions or strategies employed by employers to prevent or diminish the power of labor unions within their organization.

Nonunion

Refers to workplaces or employees not affiliated with a labor union, often implying a lack of collective bargaining for rights and wages.

Intimidate Workers

The act of frightening or overawing employees, potentially to discourage them from taking certain actions or asserting their rights.