Consider a barley swap contract calling for the exchange of 1 bushel of barley at the end of each year for a period of 3 years. The following data is available:

2 0.98 4 0.95

Barley can be stored; the proportional storage costs equal 10% per year (annually compounded) which includes the reduced quality of the barley as it is stored for longer. The current spot price for barley is $5 per bushel.

1. (a)What is the swap rate for this 3-year swap?
2. (b)Using the data in the table, what are the one-period forward interest rates?
3. (c)Another swap contract was initiated one year ago, calling for the delivery of 10,000 bushels of barley every year for a period of 3 years. The swap rate on that contract is $5.50 per bushel. Using the data in the table above, what is today's value of this swap contract to the party delivering the barley?