Which One of the Following Statements Is Correct

question 68

Multiple Choice

Which one of the following statements is correct?

• A) The price of an American put is equal to the stock price minus the exercise price.
• B) The value of a European call is greater than the value of a comparable American call.
• C) The value of a put is equal to one minus the value of an equivalent call.
• D) The value of a put minus the value of a comparable call is equal to the value of the stock minus the exercise price.
• E) The value of an American put will equal or exceed the value of a comparable European put.

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Definitions:

Universal Generalization

A form of logical inference where a general statement is made about all members of a set based on sufficient evidence or instances.

Existential Instantiation

A logical operation that infers the existence of at least one individual satisfying a particular property from a general statement.

Universal Instantiation

A logical rule of inference that allows one to deduce a particular instance from a universal statement, essentially moving from a general statement to a specific example.

Existential Generalization

A logical inference rule stating that if something is true for some member of a domain, then it is true that there exists something in that domain for which the proposition holds.