Answer: 7.8%

## Explanation The swap rate can be calculated using the formula: \[ \text{Swap Rate} = \frac{1 - DF_n}{\sum_{i=1}^n DF_i} \] Where: - \( DF_1 = 0.9709 \) - \( DF_2 = 0.8653 \) - \( DF_3 = 0.7938 \) **Step 1: Calculate the numerator** \[ 1 - DF_3 = 1 - 0.7938 = 0.2062 \] **Step 2: Calculate the denominator** \[ \sum_{i=1}^3 DF_i = 0.9709 + 0.8653 + 0.7938 = 2.6300 \] **Step 3: Calculate the swap rate** \[ \text{Swap Rate} = \frac{0.2062}{2.6300} = 0.0784 \text{ or } 7.84\% \] This is closest to **7.8%**. **Answer: A**

Author: LeetQuiz Editorial Team