INTERVIEW QUESTIONS INVESTMENT FUTURES AND OPTIONS TRADING DETAILS

Question: Explain the functioning of a three-way catalytic converter.

Answer: Conversion Factor in Futures and Options Trading Market is a factor used to equate the price of T-bond and T-note futures contracts with the various cash T-bonds and T-notes eligible for delivery. This factor is based on the relationship of the cash-instrument coupon to the required 6 percent deliverable grade of a futures contract as well as taking into account the cash instrument's maturity or call.

Conversion Factor in Futures and Options Trading Market is a factor used to equate the price of T-bond and T-note futures contracts with the various cash T-bonds and T-notes eligible for delivery. This factor is based on the relationship of the cash-instrument coupon to the required 6 percent deliverable grade of a futures contract as well as taking into account the cash instrument's maturity or call. Source: CoolInterview.com

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