Which of the following statements is false?
A) Index-related trading has increase stock price volatility.
B) The stock index options market has become the price discovery market.
C) Evidence suggests that index-related trading was responsible for Black Monday.
D) b and c only.
E) None of the above.

Question

Quizplus · Accepted Answer

The statement that the stock index options market has become the price discovery market (B) is generally considered true, as these markets often lead in reflecting new information before the individual stock markets do. Similarly, there is evidence suggesting that index-related trading contributed to the volatility and rapid market declines on Black Monday (C), making both B and C true statements. Therefore, the false statement is the option that incorrectly identifies B and C as false (D).

Which of the Following Statements Is False