Part $2$: Consider the following floating rate note that pays coupons on a quarterly basis.

Note matures in $4$ years

Quarterly coupon rate $=\frac{\text{S}\text{O}\text{F}\text{R}+3\mathrm{.}00\%}{4}$

The quoted price is $98-11($percent of par with fraction in $32nds)$

Calculate the discount margin for the loan based on the traded price. Assume a SOFR rate of $5\mathrm{.}50\%$ for the first two years and a SOFR rate of $4\mathrm{.}50\%$ for years three and four.

Part $3$: Consider the following seven$-$year fixed rate note that pays on a semi$-$annual basis.

Note matures $\frac{1}{12}\frac{?}{2031}$ with a coupon rate of $7\mathrm{.}00\%$

Settlement date is $\frac{1}{12}\frac{?}{2024},$ and the quoted price is par.

Calculate a price sensitivity table for changes in yield and maturity. Your sensitivity table should contain percentage change in price for each yield and maturity combination. $6$ different maturities and $7$ different yields create a table with $42$ cells.

a$.$ Increase the yield by plus and minus $3\%$ : $4\%$ through $10\%$ in $1\%$ increments.

b$.$ Increase the maturity from $7$ years out to $12$ years in one year increments.