Motor Town Tunes Decided to Hedge Its Risk in Several

Motor Town Tunes decided to hedge its risk in several high-value variable rate mortgages. It decided to do this by agreeing with an unrelated party to pay 8 percent on the mortgages at the end of the next two years. For both years, the market rate was 9 percent. Consequently, the unrelated party had to pay Motor Town Tunes the value of the excess interest for each year. Which derivative instrument does this scenario best represent?

A) Forward
B) Future
C) Swap
D) Option
E) Not a derivative