Question: We consider a forward contract maturing at date T written on a bond whose nominal value, coupon rate and price at date t are $1,000,

We consider a forward contract maturing at date T written on a bond whose nominal value, coupon rate and price at date t are $1,000, 4% and 99, respectively. T t = 26 days, and the 26-day Euribor is 3.5%. Draw below the payoff for this forward contract taking the point of view of the buyer.

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