Question: Plot the payoff diagrams for the following instruments: (a) A caplet with cap rate Rcap = 6.75% written on 3-month Libor Lt that is about

Plot the payoff diagrams for the following instruments:
(a) A caplet with cap rate Rcap = 6.75% written on 3-month Libor Lt that is about to expire.
(b) A forward contract written on a default free discount bond with 2 years. The forward contract expires in 3 months. The contracted price is 89.5.
(c) A 3 by 6 FRA contract that pays the fixed 3-month rate, F, against Libor.
(d) A fixed payer interest rate swap with swap rate κ = 7.5%. The swap has 2 years and receives 6-month Libor. Start date was exactly 6 months ago.
(e) A swaption that expires in 6 months on a 2-year fixed-payer swap with swap rate κ = 0.6%.

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