An asset manager wishes to reduce his exposure to the small cap stocks in his portfolio by using a swap in which he agrees to pay a dealer the return on a small-cap index based on a notional $50,000,000. In return, the dealer agrees to pay him a fixed return of 5% on the same notional amount. The payments are semi-annual and the fixed payments are based on a 30-day per month and 365-days per year calculation. If the small cap index goes moves from 195.00 to 190.00 during the semi-annual period, what net payment will the dealer pay to the asset manager at the end of the period?

− $1,282,051

$1,232,877

$2,548,666

$2,514,928

$2,482,877