1. Find the fixed rate on a plain vanilla interest rate swap with payments every 180 days (assume a 360-day year) for one year. The prices of Eurodollar zero coupon bonds are 0.9756 (180 days) and 0.9434 (360 days).

a. 5.9 percent

b. 5 percent

c. 6 pecent

d. 5.5 percent

e. 2.95 percent

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2. Use the information in question 1 to find the fixed rate on an equity swap in which the stock index is at 2000

a. 5.9 percent

b. 5 percent

c. 6 percent

d. 2.95 percent

e. 3.5 percent.

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