medium · Debt Capital Markets secondary-trading-liquidity
In the context of the 'Cheapest-to-Deliver' (CTD) bond for a government bond future, which bond in the deliverable basket will the short position holder choose to deliver?
- The bond with the longest maturity to minimize the impact of the conversion factor.
- The bond with the lowest gross basis compared to the future's price.
- The bond with the highest coupon to maximize the invoice price.
- The bond with the highest Implied Repo Rate (IRR).
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