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Trader Z holds short one T - Bond futures with delivery month DEC. It is now The 6 th trading day in DEC and Z

Trader Z holds short one T - Bond futures with delivery month DEC. It is now The 6^thtrading day in DEC and Z decides to deliver against her short position.

The DEC T-Bond futures settlement price was 101 - 12 yesterday.

Z considers the delivery of one of the following four deliverable T-Bonds:

Bond	Market price	Conversion Factor
A	125-05	1.2131
B	142-15	1.3792
C	115-31	1.1149
D	144-02	1.4026.

Which of these T-Bonds will be delivered and why. Show all your calculations.

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