Question: Suppose that a commoditys forward prices for 1 year, 2 years, and 3 years are $50, $54, and $63, respectively. The 1-year effective annual interest

Suppose that a commoditys forward prices for 1 year, 2 years, and 3 years are $50, $54, and $63, respectively. The 1-year effective annual interest rate is 3.7%, the 2-year interest rate is 4.5%, and the 3-year interest rate is 5.3%. What is the 3-year swap price?

a. $151.62

b. $64.00

c. $45.10

d. $55.41

e. $50.54

Suppose that a commoditys forward prices for 1 year, 2 years, and 3 years are $93, $86, and $80. The 1-year effective annual interest rate is 5.7%, the 2-year interest rate is 6.5%, and the 3-year interest rate is 7.2%. What is the price of a 2-year swap beginning in 1 year? (The first swap settlement will be in 2 years and the second settlement in 3 years.)

a. $73.58

b. $70.38

c. $86.66

d. $83.12

e. $140.76

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