Consider a long position in a 6 12 FRA contract at a fixed rate of 4.2%

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Consider a long position in a 6 × 12 FRA contract at a fixed rate of 4.2% Compute the payoff to this contract for a range of interest rates from 1% to 10%. Is the slope of this payoff function positive or negative? Explain. Assume the first half of the year is 181 days and the second half is 184 days. The interest-rate convention is Actual/360.

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