Theoretical price of treasury bond futures contracts


Assignment:

Q1. In determining the theoretical price of a Treasury bond futures contracts, explain why it is necessary to modify the standard cost of carry model.

Q2. When the buyer of a call option on a futures contract exercises, explain the resulting position for the buyer and the writer.

Your answer must be, typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.

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