You sell a two-year swap to exchange LIBOR for fixed-rate payments on a $100 million notional principal. LIBOR rates are as follows: One-year spot rate 2% per year. Forward rate in the second year 3.5% per year. The present value of the floating-rate payments is currently estimated as:

	a.	[$2/(1.02) + $3.5/(1.02)(1.035)2] = $5.16 million
	b.	[$2/(1.02) + $3.5/(1.035)] = $5.34 million
	c.	[$2/(1.02) + $3.5/(1.035)2] = $5.23 million
	d.	[$2/(1.02) + $3.5/((1.02)(1.035))] = $5.28 million