A State University's Activities Are Reported in the State CAFR

Multiple Choice

A state university's activities are reported in the state CAFR as a proprietary fund. The university issues variable rate debt and hedges its interest rate risk with a receive variable/pay fixed interest rate swap. If market interest rates increase, how is the derivative investment, reported on the state's proprietary funds statement of net position, affected?

A) Investment value declines
B) Investment value increases
C) Deferred outflows increase
D) Not reported