Suppose You Purchase One WFM May 100 Call Contract at $5

question 82

Multiple Choice

Suppose you purchase one WFM May 100 call contract at $5 and write one WFM May 105 call contract at $2. What is the lowest stock price at which you can break even

• A)$101
• B)$102
• C)$103
• D)$104
• E)None of the options

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Definitions:

Outside Supplier

An external company or entity that provides goods or services to another company, often used in the context of manufacturing or production.

Fixed Costs

Expenses that do not change in proportion to the level of production or sales, such as rent, salaries, and insurance premiums.

Selling Price

The cost incurred by the customer for acquiring a product or service.

Variable Production Costs

Expenses that vary directly with the volume of production or sales, like direct labor and raw materials.