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The futures price for the June 2009 CBOT bond futures contract is 118-23. A. Calculate the conversion factor for a bond maturing on January 1,

The futures price for the June 2009 CBOT bond futures contract is 118-23.

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

B. Calculate the conversion factor for a bond maturing on October 1, 2030, paying a coupon of 7.5%.

C. Suppose that the quoted prices of the bonds in (a) and (b) are 167.00 and 134.00, respectively. Which bond is cheaper to deliver?

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