Treasury Bond Future-help with understanding

[h21]

hi all, I am a bit confused about the whole concept of this, when is this bond future gettings settled? the whole issue comes from the price equation
FP=bond price x (1+riskfree)^T - FVC
why it is not bond price - PVC like other forwards idea, why are we calculating not the current price but the price in future?

 

[cpk123]

you get into the contract today - and the settlement happens in the future - say 6 months hence.
so Bond Price (1+rf)^T = Future price of the bond
and FVC = Future value of the coupon at the settlement date

 

[h21]

cpk123 wrote:
you get into the contract today - and the settlement happens in the future - say 6 months hence.
so Bond Price (1+rf)^T = Future price of the bond
and FVC = Future value of the coupon at the settlement date

correct, i think i am not clear about the whole concept behind a future like this, so future price, we are calculating the arbitrage free settlement price, not the value of future right?
oh, i think i just got clear, this section is hard for me i basically skipped it for level I and got the only C i had in this, oops, in level ii i decide to slow down and go through each concept till i am clear, well its been a drilling experience
Thanks!

 

[S2000magician]

I wrote an article on pricing forwards and futures that may be of some help here: http://financialexamhelp123.com/pricing-forwards-and-futures/
The short answer is that you can subtract the present value of the cash flows from the spot price, then increase that by the risk-free rate, or you can increase the spot price by the risk-free rate, then subtract the future value of the cash flows. They’re equivalent, because the future value of the cash flows is the present value of the cash flows increased by the risk-free rate.