Using Interest Rate Swaps to Convert Floating to Fixed

Correct! There's no restriction for floating rates. In a swap, at least one side must be variable. This could mean fixed interest rates for both parties in different currencies, as in a currency swap, or two different floating rates. The key is that, in a single currency, both cash flow series are not known at the initiation of a swap.

Which of the following is accurate with respect to swaps?

Incorrect. This suggests some sort of floor, which doesn't exist in a swap. The 5% swap rate is the fixed side of the swap, which is what a receive fixed party would receive.

Incorrect. The value of the swap begins at zero for both parties, but will quickly change to a positive or negative value as expected rates (or whatever the swap is based on) change.

Over time, the value remains zero for both parties

Both sides of a swap can be based on floating rates

A swap rate of 5% means that the receive fixed party will never have to pay less than 5%