The value of the bond is $$10000.$ Bond Basis with market CDS spread of $3\mathrm{.}25\%.$ Suppose that a $5-$year bond and $5-$year CDS $($described on slide $15)$ are both issued on April $1,2022.$ On May $1,$ the CDS spread is $3\mathrm{.}25\%$ and you open an arbitrage trade. On May $15$ the CDS spread rises to $3\mathrm{.}57\%.$

Suppose you choose to close out the basis trade on May $15.$ Explain the process and the total profit that you would receive. $($Assume that spreads on all CDS contracts must be paid annually, at the end of each year that the CDS is outstanding. Thus an investor who buys a CDS on January $1,2022$ must make the first spread payment on December $31,2022,$ and an investor who writes the same CDS receives the first spread payment on that date.$)$