5.36 A company's investments earn LIBOR minus 0.5%. Explain how it can use the

quotes in Table 5.5 to convert them to (a) three-, (b) five-, and (c) ten-year fixedrate

investments.

Table 5.5 Swap Quotes Made by a Market Maker (percent per annum)

Maturity (years) Bid Offer Swap Rate

2 2.55 2.58 2.565

3 2.97 3.00 2.985

4 3.15 3.19 3.170

5 3.26 3.30 3.280

7 3.40 3.44 3.420

10 3.48 3.52 3.500