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An investor is bearish on a particular stock and decided to buy a put with a strike price of $25. Ignoring commissions, if the option was purchased for a price of $0.85, what is the break even point for the investor

Respuesta :

Answer:

$24.15

Explanation:

Data provided

Strike price = $25

Purchased for a price  = $0.85

The computation of the break-even point is shown below:-

Break-even point for the investor = Strike price - Purchased for a price

= $25 - $0.85

= $24.15

Therefore, for computing the Break-even point for the investor we simply deduct the purchase for a price from the strike price.

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