Duration for a borrower

CFA Level III Derivatives
#1

This is from CFAI practice questions, the Pascal Montero Case Scenario.

Basically, the company issued a float rate loan then subsequently entered a pay fixed/receive float IR swap.

It explains, “the swap converts the variable-rate loan to a fixed-rate loan. Because the duration of the fixed-rate loan will exceed the duration of the variable-rate loan , the interest rate sensitivity of the overall position increases.”

Does this imply that we look at the absolute value of duration when evaluating a borrower?

#2

Lenders are long duration; borrowers are short duration.

#3

This does not quite make sense. Bottomline, if you are paying net fix your duration will reduce. Reduced duration will have less int. rate sensitivity. From the perspective of the issuer of loan it surely is the borrower and now resorted paying net fix.

#4

What, exactly, doesn’t make sense? Your reference (“This”) isn’t clear.

#5

The original question