The current term structure of quarterly compounding forward rates is given by fj(0)=0.01+0.0003j,j=0,,119, where fj(0) is the forward rate for the future period from Tj=jT to Tj+1=(j+1)T, for T=0.25, observed at t=0. Use the Black formula to price a floor and a swaption, taking $1m for notional value for both securities. 3.1. (4) Calculate the 10-year swap rate. 3.2. (4) Take the 10-year swap rate as the strike rate and calculate the value of the 10-year maturity floor. Assuming the volatility of related forward rates is 25%. 3.3. (4) Explain how to hedge the floor. 3.4. (4) Calculate the in-5-to-10 swap rate (i.e., the swap tenor is from 5 to 15 years). 3.5. (4) Price the in-5-to-10 swaption on receiver's swap (The maturity of the swaption is 5 years, and the maturity of the underlying swap is 10 years). Taking the in-5-to-10 swap rate as the strike rate and 30% for swap rate volatility. 3.6. (4) Explain how to hedge the swaption. The current term structure of quarterly compounding forward rates is given by fj(0)=0.01+0.0003j,j=0,,119, where fj(0) is the forward rate for the future period from Tj=jT to Tj+1=(j+1)T, for T=0.25, observed at t=0. Use the Black formula to price a floor and a swaption, taking $1m for notional value for both securities. 3.1. (4) Calculate the 10-year swap rate. 3.2. (4) Take the 10-year swap rate as the strike rate and calculate the value of the 10-year maturity floor. Assuming the volatility of related forward rates is 25%. 3.3. (4) Explain how to hedge the floor. 3.4. (4) Calculate the in-5-to-10 swap rate (i.e., the swap tenor is from 5 to 15 years). 3.5. (4) Price the in-5-to-10 swaption on receiver's swap (The maturity of the swaption is 5 years, and the maturity of the underlying swap is 10 years). Taking the in-5-to-10 swap rate as the strike rate and 30% for swap rate volatility. 3.6. (4) Explain how to hedge the swaption