The Conversion Factor on a Deliverable Bond Is 1

question 6

Multiple Choice

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?

• A) +0.08
• B) -0.08
• C) -0.02
• D) +0.02

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Definitions:

Federal Accountant's Exam

A standardized examination that aspiring accountants in the United States must pass to be credentialed at the federal level.

Malpractice

Occurs when a professional accountant, health care professional, or attorney—fails to meet his or her duty of care.

Cardozo Standard

A legal principle named after Justice Benjamin Cardozo, emphasizing the importance of foreseeability and reasonable expectations in determining duty of care.

Privity

In contract law, the relationship that exists between two parties to a contract giving each a recognized interest in the subject matter of the contract so that they are bound to that contract.