1. Suppose that you have $20,000 in savings that you repeatedly invest in 6-month bank certificate of deposits (CDs). After each 6-month period you spend the earned interest. Youve noticed that the quoted rate on these CDs is always 1% less than the 6-month LIBOR rate. You dont like the uncertainty of the changing rate so you decide to enter a 3-year interest rate swap contract to keep your interest payments steady.
   1. What side of the swap contract should you take? Explain your reasoning.
   2. If the swap rate is 3.8%, what is the effective interest rate of your modified investment?
   3. Your final swap payment will occur 3 years from today, 3/24/2023. Describe the relevant LIBOR rate for this payment (i.e. the x-month LIBOR rate from date y).
   4. Suppose this LIBOR rate ends up being 3.5%. Calculate:
      1. Your net swap payment
      2. Your net interest after combining this with the interest from your CD.