On September 26, 2007, the March Treasury bond futures contract 22/32. Compare the following two bonds and determine which bon DELIVER. Assume that delivery will be made on March 1st 2008 and percent. a. (17.5 points) Bond A: This is a 12 percent coupon bond that is 2026 and maturing on November 15, 2031. The bond's current pric payments on November 15 and May 15. b. (17.5 points) Bond B: This is a 13 7/8 percent coupon bond that is maturing on May 15, 2032. The bond's current price is 159 27/32. It November 15 and May 15.

On September 26, 2007, the March Treasury bond futures contract settlement price was 94 22/32. Compare the following two bonds and determine which bond is the CHEAPEST BOND TO DELIVER. Assume that delivery will be made on March 1st2008 and that the repo rate is 5.3 percent. a. (17.5 points) Bond A: This is a 1243 percent coupon bond that is callable on November 15 , 2026 and maturing on November 15, 2031. The bond's current price is 1489/32. It makes coupon payments on November 15 and May 15. b. (17.5 points) Bond B: This is a 137/8 percent coupon bond that is callable on May 15, 2027 and maturing on May 15,2032 . The bond's current price is 15927/32. It makes coupon payments on November 15 and May 15