1. A company has a fixed rate note that pays 6% for 3-years. The swap market will pay T + 45 versus Libor. The current 3-year treasury is 4.5%. How can the company use a swap to convert the interest payments to a floating rate liability?

2. A bank will receive T+50 versus Libor or pay T+45 versus Libor. For a $100 million, 10-year swap what is the approximate profit that a bank earns by entering into both a fixed rate and an offsetting floating rate swap?