Which is TRUE about Treasury bond futures?

a. They tend to follow trends set by municipal bond futures.

b.
They are traded in points and 32nds of par.

c. For every basis point increase, the bond's price declines $25.

d. On notice-of-intention day, the short acquires the bonds and delivers them to the long in return for payment.





Answer: B

Muni bonds tend to follow T-bonds, not vice versa. C relates to T-bills, not T-bonds; and D confuses delivery day with notice-of-intention day. Chapter 4: Market Operations

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