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Kala enters into a two-year interest rate swap with a level notional amount of 1,000. She...

Kala enters into a two-year interest rate swap with a level notional amount of 1,000. She exchanges variable interest payments for fixed interest payments every six months. The t-year spot rates at inception are:

t s1
.5 1.1%
1 1.25%
1.5 1.55%
2 2%

Calculate the semiannual swap rate that Kala will receive.

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