Tick all statements which are correct, but do not tick those that are incorrect.

Question $1$Answer

a$.$

The price of a put option and of a call option with the same expiration time and strike price can never be the same.

b$.$

A forward contract gives you the right but not the obligation to buy a certain product at a specified time in the future for a fixed price.

c$.$

If there is a sporting event with $3$ different outcomes with corresponding odds equal to $1=2$o$1=2,2=3$o$2=3,$ and $3=3$o$3=3,$ then there is an arbitrage opportunity for a suitable betting strategy.

d$.$

An American put option should always be exercised before its expiry time.

e$.$

If there is arbitrage, then a risk$-$neutral distribution exists.