1. a) Suppose you see Citibanks USD-denominated 5-year interest rate swap numbers quoted at 4.25% bid and 4.45% ask. Mary tells you that the relevant fixed-rate cash flow of the swap she just entered is 4.25%. Did Mary buy or sell the IRS she just entered?

b) IF Mary (from a) is a speculator, is Mary betting on/forecasting a decline in interest rates or betting on/forecasting a rise in interest rates?