The cost of delivery is calculated as: $\text{Cost of Delivery} = \text{Quoted Bond Price} - (\text{Futures Price} \times \text{Conversion Factor})$ Futures Price = $100-08 = 100 + 8/32 = 100.25$

• Bond A: Price = $122 + 4/32 = 122.125$. Cost = `$122.12`5 - (100.25 \times 1.2001) = 122.125 - 120.31 = 1.815$
• Bond B: Price = $134 + 8/32 = 134.25$. Cost = `$134.25` - (100.25 \times 1.3190) = 134.25 - 132.22975 = 2.02025$
• Bond C: Price = $118 + 20/32 = 118.625$. Cost = `$118.62`5 - (100.25 \times 1.1568) = 118.625 - 115.9692 = 2.6558$
• Bond D: Price = $141 + 24/32 = 141.75$. Cost = `$141.75` - (100.25 \times 1.3987) = 141.75 - 140.219675 = 1.530325$

Bond D has the lowest cost of delivery, making it the cheapest to deliver.