QUESTION 6 1. You are given the following spot rates from the latest upward-sloping yield curve: Year to Maturity 1 23 4 Spot Rate 4.00% 4.50% 5.25% 6.25% 5 |7.50% You are enter into a 5-year interest rate swap (with a notional amount of 100,000) to pay a fixed rate and to receive a floating rate based on future 1-year LIBOR rates. If the swap has annual payments what is the fixed rate you should pay? C C C C a. 6.70% b. 5.70% c. 7.20% d. 5.20% e. 6.20%