1. What is the spread, in basis points, between a corporation's note
with a coupon of 6.5%, 7-year remaining term, and selling for 101-3/8,
and the corporation's debenture with a coupon of 9.5%, 18-year
remaining term, and selling for 98-3/4?

2. To hedge against falling interest rates, would an investor buy
interest rate futures or sell interest rate futures?  In doing so, is
the investor transferring the futures risk premium to the speculator
or is the investor retaining the futures risk premium but offsetting
the falling interest rate risk?

3. Briefly explain why the issuer of a floating bond with a cap
effectively holds a call option on interest rates with an exercise of
the cap rate.

Sounds like homework.

As for Q. #2. Think about it.  Do you want to own a particular
interest rate if rates are falling or be able to sell the rate if
rates where falling?  Would you want to buy  a bond or sell a bond
(collect the interest)if interest rates are falling?

As for Q #3 think of the difference in price of a bond that has a
floating cap and one that doesn't.  What would be the difference in
price?  Wouldn't that be the premium of one event happening over the
other. (the expected value)