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Q7-Part II (12 marks) Today is April 15, 2019. The cheapest-to-deliver bond for a Dec. 2019 T-bond futures contract is a bond with 10% coupon

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Q7-Part II (12 marks) Today is April 15, 2019. The cheapest-to-deliver bond for a Dec. 2019 T-bond futures contract is a bond with 10% coupon rate; delivery date is Dec. 31, 2019. Coupon payment dates are April 1 and October 1 respectively every year. The interest rate is 8% (continuously compounded). The conversion factor is 1.3200. The quoted bond price is $126 today. What is the quoted futures price? (12 marks)

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