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On September 12, the cheapest-to-deliver bond on the December Treasury bond futures contract is the 9s of November 2018. The bond pays interest semiannually on May 15 and November 15. Its price is 125 12/32. The December futures price is 112 24/32. The bond has a conversion factor of 1.1002. Its accrued interest on September 12 is 2.91 and its accrued interest on December 1 is 4.92, which reflects the payment of the coupon on November 15. Assuming delivery on December 1, determine the implied repo rate. Then write an interpretation of your result

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