C. JTM has S755M in bonds - maturing in 7 years and paying a fixed 3.9% - for the same amount paying a floating rate of the Bloomberg Short Term Bank Yield Index + 1.35%. You are asked to show the cash flows for the fixed and floating scenarios and the net difference each year plus the net overall difference undiscounted and discounted using a 5% discount rate. Show all fixed and floating payments as negative cash flows. Net benefits use the formula: floating payments minus fixed payments. State whether the swap is better or worse in the space provided. Bond outstanding (MS) Maturity (yrs.) Fixed rate Spread over BSTBY BSTBY: Years 1-2 Years 3-4 Years 5-7 c. Interest Rate Swap 755 7 Year 1 3.9% Year 2 1.35% Year 3 Year 4 2.5% Year 5 2.8% Year 6 2.9% Year 7 Cash Flows (interest only) Fixed Floating Undiscounted Net Discounted Net Net