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Ms F has taken an American call option on 200 Angloplat shares at a strike price of R1 200 per share the premium that was paid for the option was R25 000 calculate the break-even price for the option?
Wiki User
∙ 15y ago
(x- 1200) multiplied by 200 - 25000 = 0 200x - 240000 =0 200x = 265000 x= 1325 is the break-even price...... i think! :) we are looking for the spot price x. The equation is = to zero which indicates that the breakeven analysis is sought. in words. (spot price- exersise price) multiplied by the option size minus the premium = 0
Wiki User
∙ 15y ago
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