Question: If a floating rate borrower hedges their interest rate risk by entering a swap as the fixed rate payer, and the swap subsequently develops a

If a floating rate borrower hedges their interest rate risk by entering a swap as the fixed rate payer, and the swap subsequently develops a negative value:

a. Then the swap has not been an effective hedge

b. The cost of funds for the borrower will rise

c. Then the borrower has paid lower than expected interest to their lender

d. The cost of funds will exceed the swap rate

e. Then the borrower has paid higher than expected interest to their lender

The answer is C.

Could you help please explain every option thank you

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