Answer: False

**Correct answer: B (False).** If \(S(t)\) and \(Q(t)\) are lognormally distributed, then their logarithms are normal. Sums or averages of the **logs** may be normal, but the **sum or average of lognormal prices is not itself lognormal**. This is why basket options often require approximation methods or Monte Carlo simulation.

Author: Manit Arora