I had chosen - "both are equally cost-effective" simply because I felt that the correlated subquery still needs to check for the existence of the equality condition for which the passes through the student and teacher tables will have to be made for every outer row. Whereas the simple subquery will have to be evaluated only once and then the IN operator would kick in. Somehow - without having any rigourous fundamentals backing my theory - I felt the queries would perform equally well and so I chose the third option.

Even though I knew that the question was testing the usage of EXISTS - I wasn't convinced that the 2nd query would perform appreciably better than the first query.

Anyway - I stand corrected.

I had not confirmed the execution plan in SSMS. Now that Cirque has confirmed what I felt intuitively I will go ahead and look at it.