Multinational Limited previously sold a three-year Treasury bond futures contract on the ASX Trade 24 and...
Multinational Limited previously sold a three-year Treasury bond futures contract on the ASX Trade 24 and now wishes to close out its open position on the delivery date. Which of the following statements relating to the closing out of a futures position is not correct?
Multiple Choice
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A new ‘buy’ contract must have the same delivery date as the original ‘sell’ contract.
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The company may choose to deliver the specified Treasury bonds in settlement.
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The clearing-house acts as counterparty to the contracts through the process of novation.
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The company may enter into a ‘buy’ contract of the same face value.
Homework Answers
option B:
In ASX ; the bonds are cash settled rather than physical delivery of treasury bonds.
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