Question $6$

$1$ pts

Suppose the quote for a five$-$year swap with semiannual payments is $8\mathrm{.}50-8\mathrm{.}60$ percent in dollar against SOFR. It means

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The swap bank stands ready to pay $8\mathrm{.}60$ percent against receiving SOFR on five$-$year loans

the swap bank will pay semiannual fixed$-$rate dollar payments of $8\mathrm{.}60$ percent against receiving six$-$month SOFR

if the swap bank is successful in getting counterparties to both legs of the swap at these prices, the bank will have an annual profit of ten basis points

$$ the swap bank will receive semiannual fixed$-$rate dollar payments of $8\mathrm{.}50$ percent against paying six$-$month SOFR