Chapter 06 · Section 6.1

Breakeven Point

Market Outlook   :  STABLE
Profit Potential :  limited
Loss Potential   :  practically unlimited
Breakeven Points :

The breakeven points occur when market price at expiration equals...

c) ...the low exercise price minus the premium.
No. The strangle has two breakeven points, one for the call and one for the put. One simply calculates the breakeven for each, taking into account that two premiums are paid out.
d) ...the low exercise price plus the premium.
e) b and c
f) b and d