Bond futures

how do u know when to divide/multiply a bond future with the conversion factor

Also do you EVER add accrued interest @ futures expiration to the stipulated futures price?

Reference: R40 EOC, question 1


future price is always divided by conversion factor. A low conversion factor denotes a relatively expensive bond

accrued interest is deducted since you want the clean future price

So the quoted futures price in a question does NOT take into accrued interest in the future? We will have to add it before figuring out the value?

Yes… It does not take into account the accrued interest at the expiration of the future…