What is Golden’s gain or loss on the cap (the change in time value) for the 6-month period ending December 31, 2016?

Golden Corporation invests in a 4.9% interest rate cap to hedge \($4,000,000\) in variable rate debt, whose rate is set at LIBOR plus 20 bp. For the 6-month period ending December 31, 2016, LIBOR is 5%. For this same period, the cap’s market value increases by \($5,000.\)

a. \($5,000\) gain

b. \($6,000\) loss

c. \($1,000\) loss

d. \($5,000\) loss