Which of the Following Statements Are Not True

question 40

Multiple Choice

Which of the following statements are not true?

• A) The t and F procedures are not "distribution-free" procedures because they require the distributed assumption of normality.
• B) The t and F procedures are not "nonparametric" procedures because they are based on the normal parametric family of distribution.
• C) Distribution-free and nonparametric procedures are valid for very few different types of underlying distributions.
• D) Generally speaking, the distribution-free procedures perform almost as well as their t and F counterparts on the "home ground" of the normal distribution, and will often yield a considerable improvement under nonnormal conditions.
• E) All of the above statements are true.

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Definitions:

American Put

An option contract giving the holder the right, but not the obligation, to sell a specified amount of an asset at a predetermined price before or on a specified expiration date.

European Call

An option contract that allows the holder to buy the underlying asset at a specific price only on the expiration date.

American Option

A type of options contract that allows the holder to exercise the option at any time before and including its expiration date.

Expiration Date

The specified date on which an option, futures contract, or other derivative ceases to exist.