The MERGE statement is used to combine the insertion, updating, and deletion of rows in a single statement. The WHEN NOT MATCHED clause can be used to specify the inserts to be performed. The WHEN matched clause can be used to specify the updates to be performed, but since there is no properly matching clause for updates in the options, option E which mentions 'WHEN WATCHED clause' likely contains a typographical error and intends to refer to the matched condition.