Option1 Long/Short/cannot tell

Option2 Long/Short/cannot tell

When a swap is initially structured, the dealer uses a series of forward rates to predict future floating rates, and then calculates the fixed rate that makes the present value of the expected floating cash flows equal to the present value of the fixed cash flows. This allows the swap to be valued at $0 at inception Assume that once a swap has begun, the yield curve representing the expected floating rates shifts upward. This shift is good news for the entity that is the swap and bad news for the entity that is the swap