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.

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

a) $5,000 gain

b) $6,000 loss

c) $1,000 loss

d) $5,000 loss