Explanation

For fixed-income futures contracts (like Treasury bond futures), the adjusted price or invoice price that the long position pays to the short position is calculated as:

However, the question specifically asks for the adjusted price at Time 0, which typically refers to the futures price component before adding accrued interest.

Looking at the options:

A: sum of the quoted bond price and accrued interest - INCORRECT

• This describes the cash price of a bond, not the futures contract adjusted price

B: ratio of the quoted futures price to the conversion factor - INCORRECT

• This would be the implied bond price, not the adjusted futures price

C: product of the quoted futures price and the conversion factor - CORRECT

• This gives the futures price adjusted for the specific bond's characteristics
• The conversion factor adjusts for the bond's coupon and maturity relative to the notional bond

In practice:

• Quoted futures price × Conversion factor = Adjusted futures price
• This adjusted price represents what the long pays for the bond (excluding accrued interest)

Therefore, the correct answer is C.