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
