Suppose a Bank Makes a $1,000 Loan to You at 5

Suppose a bank makes a $1,000 loan to you at 5 percent interest when the expected and actual inflation rate are zero percent. Before you pay back the $1,000 principal and $50 interest, the inflation rate increases to 10 percent. Does anyone lose from this situation?

A) Nobody loses, because the terms were set before the inflation rate increased, and once the terms are set, inflation does not affect the situation.
B) You lose, because the dollars that you have borrowed are worth more the higher the inflation rate.
C) The banker loses, because you will be paying back the loan with dollars that are worth less than the dollars you borrowed.
D) Both the banker and you lose, for the reasons in answers b and c.
E) There is not enough information to answer the question.