**The next set of questions apply to a Floating Rate Note**

1) Heres the initial spot LIBOR curve: (1 yr = 2%) (2 yr = 2.5%) (3 yr = 3%) (4 yr = 3.4%)

Calculate the price of a 4-yr (annual pay) FRN paying LIBOR + 2%, assuming initially that the markets required spread for this issuer is 2%

2) After the FRN is issued (but prior to the first coupon being set), the LIBOR curve changes to: (1 yr = 3%) (2 yr = 3.5%) (3 yr = 3.75%) (4 yr = 4%)

Calculate the new price assuming the markets required spread remains 2%.