Given That Call Prices Are Convex in Strike Prices,the Implication

question 15

Multiple Choice

Given that call prices are convex in strike prices,the implication is that

• A)Put prices are concave in strike prices.
• B)Put prices are linear in strike prices.
• C)Put prices are convex in strike prices.
• D)Put prices may be convex or concave in strike prices.

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Definitions:

Consequent

The outcome or result in a conditional statement that logically follows from the antecedent, given the antecedent is true.

Hypothetical Proposition

A statement or proposition based on hypothesis rather than firm evidence, used in logical and philosophical arguments.

Converse

In logic and mathematics, the converse of a statement is formed by reversing its terms and predicate, often producing a different statement.

Disjunctive Proposition

A statement that uses 'or' to connect two or more alternatives, where at least one must be true.