Ace enters a $10-$year GBP interest rate swap with a client in which Ace receives an initial six$-$month GBP MRR of $1\mathrm{.}75\%$ and pays a fixed GBP swap rate of $3\mathrm{.}10\%$ for the first semiannual period. Six months later, Ace and its counterparty settle the first swap payment, and no change has occurred in terms of future interest rate expectations. Which of the following statements best describes the value of the swap from Ace$$s perspective? Ace has an MTM gain on the swap, because once it makes the first known net payment to its counterparty, the remainder of the future net fixed versus floating cash flows must have a positive present value from Ace$$s perspective.

B$.$Ace has an MTM loss on the swap, because once it receives the first known payment from its counterparty, the remainder of the future net fixed versus floating cash flows must have a negative present value from Ace$$s perspective.

C$.$While the present value of fixed and future cash flows was set to zero by solving for the swap rate at inception, we do not have enough information to determine whether the swap currently has a positive or negative value from Ace$$s perspective following inception.