You have $50,000 to invest in shares of XYZ that currently trade at $50. You choose to invest 20% of your funds in long-term call options with a strike of $60 that currently are quoted at $1.35. The options expire in 1 year. The other funds will be placed into a money market account earning 0.8%, compounded monthly. 

How much in dollars would the stock price have to increase in order for you to breakeven on this strategy?

Answer rating: 100% (QA)

To calculate the breakeven point for this investment strategy we need to consider the potential gain... View the full answer