Question 1/6 1 point Term structure of interest rates and swap valuation Suppose the current term structure of interest rates, assuming annual compounding, is as follows: S1 S2 S3 S4 S5 S6 7.0% 7.3% 7.7% 8.1% 8.4% 8.8% What is the discount rate d(0, 4)? (Recall that interest rates are always quoted on an annual basis unless stated otherwise.) Please submit your answer rounded to three decimal places. So for example, if your answer is 0.4567 then you should submit an answer of 0.457. NEXT tion to Derivative Securities 12 min 0.732 2. Swap Rates Suppose a 6-year swap with a notional principal of $10 million is being configured. What is the fixed rate of interest that will make the value of the swap equal to zero. (You should use the term structure of interest rates from Question 1 Please submit your answer as a percentage rounded to two decimal places. So for example, if ye answer is 1.567 or equivalently 0.01567, then you should submit an answer of 1.57 3. Heding usine futures suppose a farmer is expecting that her crop of oranges will be ready for harvest and sale as 150.000 pounds of orange juice in 3