simplified Libor in arrears payoff: pay at time 1 1-year Libor reset at time 1 F(1) $$ \frac{NPV(0)}{P_1(0)}=\mathbb{E}^1 (\frac{F(1)}{P_1(1)}) $$ where $$\mathbb{E}^1$$ is measure with numeraire $$P_1(t)$$ change measure from time 0 to time 1 (time while F(t) is changing)…