Identify the INCORRECT Statement

question 15

Multiple Choice

Identify the INCORRECT statement.If we try to fit the following derivatives in a single-period framework,then:

• A) an American call option becomes a European call option
• B) an American put option becomes a digital put option
• C) a futures contract simplifies to a forward contract
• D) a swaption becomes a deterministic security
• E) None of these answers are correct.

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Definitions:

Conjunction

The combination of two or more events, conditions, or propositions, typically expressed in logic and mathematics.

Symbolic Logic

A branch of logic that uses symbols to express logical representation and reasoning.

Bi-Conditional

A logical relationship where two statements are both true or both false simultaneously.

Tautology

A redundant or circular statement in which the conclusion is identical to the premise.