In this workout, we're told a bank can issue fixed coupon bonds at the following spreads over treasury, and we've got various maturities, such as a five-year maturity. And the funding spread is US Treasury plus 67 bps. Under that, it says the bank group treasury is looking to swap the fixed coupons that they're paying to floating. The following market data is available and we're given various maturities, US treasury yields and SOFR swap spreads. We're asked to calculate the approximate cost of funding over SOFR for all three maturities. So the first thing we need to do is work out the swap setup. So in the middle of this diagram, we can see the bank and they're paying to the left to the bond holders, US treasury, plus a spread of X. On the right hand side we're now going to set up the swap. The bank will pay SOFR to the swap holder and they'll receive back from the swap holder US treasury plus a spread of Y. Now interestingly, the US treasuries that they're receiving from the swap holder is then paid out to the bond holder. So the US treasuries, they just cancel out, they net off. So the net effect of all of this is that the bank is paying SOFR to the swap holder, plus they're paying a spread of X to the bond holder minus the spread of Y that they're receiving from the swap holder. So the funding cost for each maturity, we need to calculate this. We've got three different maturities and we've got the funding spreads from the top of the Excel file. We've then got the SOFR swap spreads. Again, they were given to us in the second table. There they are. We need to work out the funding cost. Well, the first thing that our cost is going to be is SOFR. So we need that to be put in. So start out with that SOFR plus, but it's then gonna be plus a spread of X minus Y. So X was that funding spread minus Y, the SOFR spread, giving us a funding cost for the five year maturity of SOFR plus 92 bps. If I copy that down, I can get the funding cost for the seven year maturity and for the 10 year maturity.