1.A company can invest funds for five years at 6% per annum with semiannual compounding. The five-year swap rate is 6.3%. What floating rate of interest can the company earn?,,2.Suppose that the yield curve is flat at 5% per annum with continuous compounding. A swap with a notional principal of $100 million in which 6% is received and six-month LIBOR is paid will last another 15 months. Payments are exchanged every six months. The six-month LIBOR rate at the last reset date (three months ago) was 7%.,(i) What is the value of the fixed-rate bond underlying the swap?,ii) What is the value of the floating-rate bond underlying the swap?,(iii) What is the value of the payment that will be exchanged in 3 months?,(iv) What is the value of the payment that will be exchanged in 9 months?,(v) What is the value of the payment that will be exchanged in 15 months?,(vi) What is the value of the swap?,