Q7 5 Points The following information of the spot rates is available: Time (t) Spot rate (rr) 1 4.5% 2 4.8% 3 5.3% 4 6% 5 6.8% The company ABC and the bank XYZ enter into a 4-year interest rate swap. The notional amount of the swap is a level $100,000 for all 4 years. This swap contract has a settlement period of one year. The variable interest rate will be based on the one year spot rate at the start of each settlement period. A new employee in bank XYZ is about to make this contract for the purpose of job training with the supervision by the manager of Treasury department in this bank. Q7.1 2 Points Before finalizing the interest rate swap contract, the manager figures out that the new employee makes mistakes by using two-year forward rates beginning 0 years, 1 years, 2 years, and 3 years from now, respectively. Calculate each of four two-year forward rates. Enter your answer here Q7.2 3 Points Now, this new employee clearly understands the structure of the interest rate swap contract. Calculate the swap rate. (Please be careful that this question is totally independent from the previous part question.) Enter your answer here