On June 17, 2009, the futures price for the June 2009 bond futures contract is 118-23.

1)Calculate the conversion factor for a bond maturing on January 1, 2025, paying a coupon of 9.5%.

a)1.4

b) 1.35

c) 1.31

d) 1.29

e) none of the above

2)The conversion factor for Bond B maturing October 1,2031 paying coupon rate of 7.5% is

a) 1.3166

b) 1.2212

c) 1.1788

d) 1.1121

e) none

3) Suppose the quoted prices for Bond A is 167 and for Bond B is 134, which bond is cheaper to delivered?

a) Bond A

b) Bond B

c) Both are equally cheap

d) Answer cannot be determined

4)Assuming the cheapest to deliver bond is actually delivered, what is the cash price received for the bond?

a) 139.95

b) 157.79

c) 141.52

d) none