A company has sold a three-year Commonwealth Treasury bond futures contract,and now wishes to close out its open position on maturity date.Which of the following statements relating to the closing out of a futures position is incorrect?
A) The company may enter into a 'buy' contract of the same face value.
B) A new 'buy' contract will have the identical delivery date as the original 'sell' contract.
C) The company may choose to deliver the physical market Treasury bonds in settlement.
D) The clearing house acts as counterparty to the contracts, through the process of novation.
Correct Answer:
Verified
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