Question Re: Swap Strategies

CFA Level III Derivatives
#1

I’m a bit confused on this seemingly simple subject… could someone please offer some clarification?

If you purchase a payer swaption and decide to exercise it (so you’re paying fixed, receiving floating)… (1) does your CF risk INCREASE because you’re now receiving fluctuating cash flows rather than fixed payments? and (2) your MV risk DECREASE because your duration has decreased to a negative number?

Some of the material/questions I’ve been reviewing say entering a payer swaption (pay fixed, receive floating) decreases CF risk and increases Market Value risk. This seems to be opposite, so something isn’t clicking. Thanks in advance.

#2

your cash flows are certain so CF risk decreases. assuming you are the borrower

mv risk increases b/c if rates fall, your swap value goes down as you are stuck paying a higher rate

#3

any good video online to understand curremcy swap valuation