Trooper limited is an American company which needs to raise US$1,000,000 for its expansion inside US. The options are:

a. A 2-year floating rate note at 1% above the 1-year US Dollar rate. Interest is paid once a year.

b. A 2-year bond sold in the US at a fixed interest rate of 5%.

Currently, the 1-year US dollar LIBOR rate is 3.50% and is expected to rise to 4.5% next year. Which security should the treasurer choose if borrowing costs are same for both securities?