At What Point on the Graph of Possible Values for a Call

question 36

Multiple Choice

At what point on the graph of possible values for a call option does the buyer break even financially?

• A) When the stock price equals the strike price
• B) At any point on the upward-sloping segment of the graph
• C) When the stock price equals the cost of the option plus the strike price
• D)At the point where the graph intercepts the y-axis

---

Definitions:

Instrument

A formal document, such as a contract, will, or security, that legally records a right, obligation, or transaction.

Good Faith

The honest intention to act without taking an unfair advantage over another party, based on the belief that others will similarly act honestly.

Altered

Changed, modified, or adjusted from the original state or form.

Green Grocer

A retailer specializing in the sale of fresh produce, including fruits and vegetables.