Mia agrees to lend Vu $10,000 for a year. The pair agreed on a nominal interest rate of 10% with expectations that inflation rate during the year would be 3%. Inflation turns out to be 7%. Which of the following statement is correct?

Group of answer choices

a. Since the inflation turns out to be higher than expected, Mia (the lender) wins, Vu (the borrower) loses

b. Since the inflation rate turns out to be higher than expected, Mia (the lender) loses, Vu (the borrower) wins

c. Since the inflation rate turns out to be higher than expected, both Mia and Vu lose to unanticipated inflation

d. Although the inflation rate turns out to be higher than expected, it remains below the interest rate (7% vs. 10%). Therefore, Mia wins and Vu loses