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The Conversion Factor on a Deliverable Bond Is 1

question 6

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The conversion factor on a deliverable bond is 1.03 and the bond price is 100.50.The observed futures price is 97.5 and the YTM is 5.8%.What is invoice less market price on the security?


Definitions:

Future Delivery

A contractual agreement to buy or sell an asset at a predetermined price at a specified future date, often used in commodities trading.

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