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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:

Agreement

A mutual understanding or arrangement between two or more parties, often formalized by a contract or other legal document.

Majority

The greater part or number; the number greater than half the total.

Prejudice

Preconceived opinion or bias against an individual or group without sufficient knowledge, thought, or reason.

Negative Stereotype

An oversimplified and widely held fixed idea or image of a particular type of person or thing, which is often negative and prejudicial.

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