Which of the following statements is characteristic of futures trading on the Australian Futures Exchange (ASX Trade 24)?
A) Pricing of bond contracts is on the basis of their yield to maturity.
B) Transactions in the 'trading pits' are conducted by 'open outcry'.
C) The ASX Trade 24 clearing house enforces full payment of the initial contract amount.
D) All of the given answers are correct.

Question

Quizplus · Accepted Answer

Pricing of bond contracts on the Australian Futures Exchange (ASX Trade 24) is indeed based on their yield to maturity. This is a common practice in futures trading where bond futures are priced according to their expected yield at maturity, reflecting the interest rate environment and the credit quality of the issuer.

Which of the Following Statements Is Characteristic of Futures Trading