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The most recent settlement T-bond futures price is 110. Which of the following four bonds is cheapest to deliver (use the gross basis)? Quoted bond

  1. The most recent settlement T-bond futures price is 110. Which of the following four bonds is cheapest to deliver (use the gross basis)?
  1. Quoted bond price = 123; conversion factor = 1.1000.
  2. Quoted bond price = 155; conversion factor = 1.4000.
  3. Quoted bond price = 145; conversion factor = 1.3000.
  4. Quoted bond price = 137; conversion factor = 1.2200.

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