5. A money markets desk holds a floatingrate note with an eight-year maturity. The interest rate is floating at three-month LIBOR rate, reset quarterly. The next reset is in one month. What is the approximate duration of the floating-rate note?

A. 3 months

B. 1 month

C. 2 months

D. 8 years

6. A three-year risk-free 8% coupon bond (coupons paid annually) is trading at par. One- and two-year spot rates are 6.5 percent and 7.0 percent, respectively. The three-year spot rate is closest to ________.

A. 8.1%

B. 9.2%

C. 9.0%

D. 10.1%