1. Netix Co. that has issued oating-rate notes now believes that interest rates will rise. It decides to protect itself against this possibility by entering into an interest rate swap with a dealer. In this swap, the notional principal is $31] million and the company will pay a xed rate of 5.5 percent and receive LIBCR. The current LEBCE is 5 percent. Calculate the rst payment and indicate which party (Netix or the dealer} pays which. Assume that payments will he made on the basis of Qf days. 2. A US. company enters a currency swap in which it pays a xed rate in a foreign currency, the Canadian Dollar, and the Canadian connterparty pays a xed rate in US dollars. The notional principals are USDT,5|],IEI and CADl,m,D. The xed rates are 5.6% [LIECR, annualized] in [7.3. dollars and 4% {LIECPL annualized] in Canadian dollars. Both sets of payments are made on the basis of 31} days per month and 3160 days per year, and the payments are made semi-annually. {a} Determine the initial exchange of cash that occurs at the start of the swap. {h} Determine the semi-annual payments. {c} Determine the nal exchange of cash that occurs at the end of the swap. {d} Give an example of a situation in which this swap might he appropriate