Consider Two Portfolios,A and B

question 13

Multiple Choice

Consider two portfolios,A and B.We consider their values today and on some future date,time T.There are no cash flows on intermediate dates.If arbitrage opportunities are ruled out,then which of the following statements is INCORRECT?

• A) If the portfolios A and B always have the same value at time T,then they must have the same value today.
• B) If the portfolios A and B have the same value today,then they must always have the same value at time T.
• C) If we subtract portfolio A from B,and the resulting portfolio always has a zero value at time T,then it must have a zero value today.
• D) If we subtract portfolio A from B,and the resulting portfolio always has a positive value at time T,then it has a positive value today.
• E) If we subtract portfolio A from B,and the resulting portfolio has a zero value today,then it need not have a zero value at time T.

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