1) A portfolio manager entered a swap with a dealer. The swap's notional principal is $1000, payments are to be made very quarter, and the swap allows netting of payments. The dealer agrees to pay a fixed annual rate of 9%, while the asset manager agrees to pay the return on SP500 index. The SP500 index at the initiation is 298. If SP500 six months later becomes 297.

How much would be the payment from the dealer to the asset manager?

2)Suppose we get into a swap with a notional principal of $1,000,000.

We are the fixed-rate payer, and we pay monthly. The fixed payments rate is 11.6%. Our counter-party makes floating-rate payment on the basis of LIBOR.What would be our payoff, if the LIBOR at the upcoming payment time becomes 11.06%?