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Chapter 17 - Question 9 Suppose that an interest rate derivative has the payoff at t=T max(rr,0). Draw this function. On the same graph sketch

Chapter 17 - Question 9

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Suppose that an interest rate derivative has the payoff at t=T max(rr,0). Draw this function. On the same graph sketch the value of the contract at various times up to expiry. What is the behaviour of the contract for large r

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