Dude u edited ur post to which i commented and now u explain new things? Hehe! Why? Coz in that post u mentioned there is 30% remaining works, seems u r mixed up with variance.  I dont argue with u dude, in fact SPI and CPI is simplest to understand. But dont impress that if SPI = 0.7 then the remaining work is 30%. anyways u already edited ur post, meaning u understood my point.

YES

My old boring statement – During Project Close Out process, as a PM, I check if the project is finished (against project scope) or if the project is terminated/cancelled (in that case, I would investigate the reason for termination). Can you show me where’s its being said NO?

Sugar is needed to make coffee…agree and accepted. You are saying “If sugar is needed to make coffee…Sugar is coffee”, I have objection to this.
 

sspawar my dear, my answer is "or"   (lets have some laughs dudes).  Why "or"? how can i answer only "yes" or only "No" your question has mentioned both option. You should have asked either one only, so my answer could be specific, either "yes" or "no". See how questions could be tricky and how analysis could be as wise and smart as dealing with the PMP actual exam?

Well, to satisfy the intent of your question (but not the context), cancellation or termination of a project, though goes through some defined processes of the general "Closing Process Group" especially the "Close Procurement" process but in most cases a special case. Remember that the Closing Process Group has only two (2) processes involved, these are the 1) Close Project or Phase and 2) Close Procurement process.  Hence, there must be a real care when to say or use the word cancellation vis-a-vis "closed-out".

For you dude and guys to deeply learn this, as my colleague saket who is also a PMP trainer, you need to read once again these chapters (these 2 closing process group processes) and understand very well. When we say that the project is "Closed-out" meaning, it has gone through all the satisfactory procedural requirements of this Process which are quite and obviously more inclined to verification of deliverables and meeting the project's objectives. In my appreciation of the word "Closed-Out" as a technical definition, it has to refer to a completion of the project afar from just a mere project cancellation or termination. Look, in essence, if you mean the project is complete, then why would you use the word cancelled, or the other way around, if you mean that the project is cancelled or terminated, why should you say closed-out or complete? 

Notice that i already pointed out in my prior posts that this question has a similar question already posted in this forum and somewhere else, however the only difference is that the word "post-mortim"was used to clearly connote the idea of cancellation or termination before the project is completed. 

I and Saket are obviously having the same context of argument here. 

Going back to my previous notions, noticed i have asked these questions.

1. "Is it not possible that all deliverables are finished, though finished behind schedule?"  Note also that this question was raised in response to your point that "The project's deliverables have all been finished) could not be a correct answer ".  So if that is the case, then why the word closed-out is used instead of saying post-mortim or cancelled? Notice that as per PMBOK4, accepted deliverables are a foremost INPUT of Close Project or Phase process. Though you are right, in your pasted line from PMBOK4, page 99 that Close Project/Phase also establishes procedures to investigate and document the reasons related to project termination or cancellation. Saket is correct in his rebut against your notion or understanding of this context as he said, you should have understood it. And now i will tell you what i am sure Saket was refering. Take note dude that Close Project/Phase only provides the procedures related to investigations and documentations of the reasons for actions taken if a project is terminated or cancelled before completion. And obviously, take note that these investigations and documentations are far from the true processes involved in the context of Closing project/phase e.g. acceptance of deliverables.

2. "beyond the elapsed contractual duration, should SPI not to be used anymore as a performance measuring tool?" - i think you have never answered this question. I raised this question based on your premise that an SPI less than 1 would never mean in the context of the question that the project has never been completed. I could have deciphered that from your illustrative calculations. When SPI <1 for instance, which means less work is achieved than planned, what if it came to a time where there is a schedule delay beyond the contractual duration, is there an implication of the values of SPI e.i. < or > 1? In other words, is it possible that at some time beyond the contractual duration (meaning there is delay already in the project completion) the value of SPI could also be > 1? and would just simply mean that at that point of time, the achieved works are more than the planned works?  Can you see the logic here? If you say, yes it is possible that SPI could be > 1 even if the project completion is already delayed as per the required contractual duration of completion, then it will draw up a conclusion that SPI would never necessarily tell us that if it is >=1, then the project's performance is healthy. There could be a hypothesis behind this, that must be considered by PMI, and should be intellectually explained in PMBOK. I can prove my idea and this hypothesis and i could publish it a proper time.  

Therefore, going back to the question with all of my premises and Saket's as well, considering that the question never connoted any truth regarding cancellation or termination, while in my professional judgement and also supported by specific articles in the PMBOK, the given facts in the question does not restrict the assumption of having all the deliverables completed because of the word "Closed-Out", hence my Option is B, which is also saket's.

I know that the only realistic choices are A and B however. Lastly, as saket has told us, Mr. Oliver could have his own view in framing the question, otherwise the question could be said to be not properly worded, or there is such a PMBOK provisional crisis here ha ha! just like in a government when there are conflicts between certain laws and the constitution, there is what we call "constitutinal crisis".

Sorry dudes if i wrote very long.. Remember I am a technical writer (and a lawyer said my dear good dude sspawar he he)