Short Answer
The following prices are available for call and put options on a stock priced at $50.The risk-free rate is 6 percent and the volatility is 0.35.The March options have 90 days remaining and the June options have 180 days remaining.The Black-Scholes model was used to obtain the prices.
Use this information to answer questions 1 through 20.Assume that each transaction consists of one contract (for 100 shares)unless otherwise indicated.
For questions 1 through 6,consider a bull money spread using the March 45/50 calls.
-What is the breakeven point?
A)$48.02
A)none of the above
B)$41.98
C)$55.66
D)$50.00
Correct Answer:

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