1)Boeing has entered into a 10 year interest rate swap with Bank America with a notional principal of $500 million. Boeing has agreed to pay LIBOR the floating rate side of the swap. Bank America has agreed to pay a fixed rate of 7%. Assume that next year, LIBOR is 7.75%. The net payment at that date will be:

choose one of the following:

		Bank America pays Boeing $25,000,000
		Boeing pays Bank America $3,750,000
		Boeing pays Bank America $503,750,000
		Boeing pays Bank America $2,500,000
		Bank America pays Boeing $2,500,000 2. United Air has a 7.5% coupon 30 year bond (par value = 1,000). Assume that coupon payments are semi-annual and that the current price is $1040.60. What is the yield-to-maturity of this bond? Be sure to report on an annualized basis and as a raw number - i.e. if your answer is 6.5%, input as 6.5.