7. You are given the prices of three zero-coupon bonds as a percentage of their redemption values. Maturity (in years) 1 2 3 Price 98% 96% 93% You enter into a 3-year interest rate swap in which you pay a fixed rate and receive a floating rate that is equal to the 1-year LIBOR rate. The notional amount of the swap is 100,000, and the swap has annual payments. Calculate the fixed rate that you pay. A 1.40% B 2.44% C 3.20% D 3.44% E 6.40%

10. Assuming the following spot rate curve: Maturity (in years) 1 2 3 4 5 Spot Rate 3.2% 3.5% 3.9% 4.2% 4.3% Calculate the swap rate for a swap with annual settlement periods, three-year tenor, a constant notional amount, and is deferred for one year. A 4.22% B 4.32% C 4.42% D 4.52% E 4.62%