... then the conversion factors are larger than one, but the shorter the maturity, the closer the factor comes to one. Similarly, when the yields are smallerthan six percent, the conversion factors ... informationof the financial products.Since the party with the short position may decide which bond to deliver, he chooses the Cheapest -to- Deliver bond (CTD). The basket of bonds to choose from, consists ... have to discount with P (t, ti) to find the value of the coupon at time t. The total price of the coupon-bearing bond is the sum of the discounted coupon payments plus the discounted notional....