Conversion factor for a bond maturing, Finance Basics

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Conversion factor for a bond maturing

It is June 25, 2007. The futures price for the June 2007 CBOT bond futures contract is 118-23.

a. Calculate the conversion factor for a bond maturing on January I, 2023, paying coupon of 10%.

b. Calculate the conversion factor for a bond maturing on October 1, 2028, paying a coupon of 7°/1.

c. Suppose that the quoted prices of the bonds in (a) and (b) are 169.00 and 136.00, respectively. Which bond is cheaper to deliver?

d. Assuming that the cheapest-to-deliver bond is actually delivered, what is the cash price received for the bond?

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Finance Basics: Conversion factor for a bond maturing

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Finance Basics: Conversion factor for a bond maturing

Reference No:- TGS052548

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Recent Questions Asked Finance Basics

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Finance Basics: Conversion factor for a bond maturing

Reference No:- TGS052548

Recent Questions Asked Finance Basics

Q : What is an intangible asset

Q : Current yield on bonds-effective annual yield

Q : Capitalized due to the requirement of fasb

Q : What was the depletion charge per ton

Q : Conversion factor for a bond maturing

Q : Make the journal entry to record the interest

Q : Why assumption of independence of risks matters in insurance

Q : Marginal tax rates-expected rate of return

Q : What are the federal income tax consequences

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