1) (a) Company A has been offered the rates shown in Table 7.3. It can borrow for 3 years at 6.45%. What floating rate can it swap this fixed rate into? (b) Company B has been offered the rates shown in Table 7.3. It can borrow for 5 years at LIBOR plus 75 basis points. What fixed rate can it swap this floating rate into?

2) (a) Company X has been offered the rates shown in Table 7.3. It can invest for 4 years at 5.5%. What floating rate can it swap this fixed rate into? (b) Company Y has been offered the rates shown in Table 7.3. It can invest for 10 years at LIBOR minus 50 basis points. What fixed rate can it swap this floating rate into?

3) The 1-year LIBOR rate is 10% with annual compounding. A bank trades swaps where a fixed rate of interest is exchanged for 12-month LIBOR with payments being exchanged annually. The 2- and 3-year swap rates (expressed with annual compounding) are 11% and 12% per annum. Estimate the 2- and 3-year LIBOR zero rates.

Please show steps and formula.