Determine the conversion factor for delivery

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1. Determine the conversion factor for delivery of the 7 1/4’s off May 15, 2026 on the March 2010 T–bond futures contract. show your work

2. Compute the dollar profit or loss from borrowing the present value of $5,000,000 at one month LIBOR and lending the same amount at two month LIBOR while simultaneously selling one November Fed funds futures contract. Assume that rates on November 1 were 7 percent, there is no basis risk, and the position is unwound on November 1. Select the closest answer. show your work.

Reference no: EM131828933

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