Question: please work out problems step by step. Problem 6.27. It is March 10, 2014. The cheapest-to-deliver bond in a December 2014 Treasury bond futures contract

please work out problems step by step. Problem 6.27. It is Marchplease work out problems step by step.

Problem 6.27. It is March 10, 2014. The cheapest-to-deliver bond in a December 2014 Treasury bond futures contract is an 8% coupon bond, and delivery is expected to be made on December 31 31, 2014. Coupon payments on the bond are made on March 1 and September 1 each year. The rate of interest with continuous compounding is 5% per annum for all maturities. The conversion factor for the bond is 1.2191. The current quoted bond price is $137. Calculate the quoted futures price for the contract

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