=FV0,T[B<sub>0</sub>(T+Y)+AI<sub>0</sub>−PVCI<sub>0</sub>,T] is the formula used in the CFA curriculum to calculate futures price on a bond the schweser uses FP = fullpriceX(1+RF)T -AI - FVC do you know why they add AI in CFA curric, but subtract it in the schweser?
Both add AI0 and subtract AIt. Be careful how you read formulas.
Full price by definition includes AI0.
Thank you for your reply.
The question I did, they add AI0 to get the full price of the bond which they then times by the risk free rate over the period. After this they multiply by the conversion factor and then ADD the AIt .It is question 13 in the CFA curric under the derivatives section.
There’s many ways to write the same equation. Both methods are right.
FP = FV0,T[B<sub>0</sub>(T+Y)+AI<sub>0</sub>−PVCI<sub>0</sub>,T]
FP = fullpriceX(1+RF)T -AIt - FVC
FP = (fullprice-PVC)(1+RF)T - AIt
FP = (clean price + AI0)(1+RF)T AIt - FVC