Hannah borrowed $10,000 for two years at a variable interest rate. Hannah will make an interest payment to the lender at the end of each year and also repays $10,000 at the end of 2 years. The one-year spot rate is 5% and the 2-year spot rate is 4%. Hannah decided to enter into a two-year interest rate swap with annual settlement periods under which she will swap the variable interest rate for a fixed interest rate. Determine the amount that Hannah should pay the swap counterparty at the end of the first year and the amount she should receive from the swap counterparty at that time under this arrangement. Possible Answers A should pay $500 and receive $402 B should pay $402 and receive $500 should pay $500 and receive $400 D should pay $400 and receive $500 E should pay $400 and receive $402 Hannah borrowed $10,000 for two years at a variable interest rate. Hannah will make an interest payment to the lender at the end of each year and also repays $10,000 at the end of 2 years. The one-year spot rate is 5% and the 2-year spot rate is 4%. Hannah decided to enter into a two-year interest rate swap with annual settlement periods under which she will swap the variable interest rate for a fixed interest rate. Determine the amount that Hannah should pay the swap counterparty at the end of the first year and the amount she should receive from the swap counterparty at that time under this arrangement. Possible Answers A should pay $500 and receive $402 B should pay $402 and receive $500 should pay $500 and receive $400 D should pay $400 and receive $500 E should pay $400 and receive $402