a) Suppose notional principal (NP) = $100 million. An investor buys a quarterly settlement LIBOR in a 2-year swap, paying a swap fixed rate of 7%. If LIBOR turns out to be 7.2% in next quarter, what is the investors cash flow?

b) A 5-year swap is initiated with annual payments and notional principal of $100m. The swap fixed rate = 8%. Suppose that after one year, the market rate has fallen to 7%. What is the market-to-market value of the swap (in millions of dollars)?

c) A Eurodollar futures contract currently has a futures price of 99.70. If the LIBOR rate at contract maturity is .50%, what is the profit (positive number) or loss (negative number) realized by the trader on the long side of the contract?