I I just need help with question b. please.

Jalue of bond issue next June Maturity of bond issue, in years Frequency of interest paid in year Current annual interest (cost of debt), November Expected increase in interest rate in basis points ncrease in annual interest rate in percentage Maturity of hypothetical bond in futures contract Annual coupon rate of hypothetical bond in futures contrac $10,000,000 20 2 11.00% 100 1.00% 20 6.00% Pts. 32nds of 100% Low Futures Prices: Treasury Bonds Delivery Month (1) Dec Mar June $100,000 Open (2) 94'28 96'03 95'03 High (3) 95'13 96'03 95'17 94'22 9513 95'03 Settle (5) 95'05 95'25 95'17 Change (6) +0'07 +0'08 +0'08 Interest (7) 591,944 120,353 13,597 To protect from rising interest rates, firm must sell futures contracts Vhole percentage of quote 2nds of 100% of quote 95 17 alue of 1 futures contract Number of futures contracts to sell (to the nearest whole) otal value of futures contracts Formulas #N/A #N/A #N/A Determination of how well hedge performed alue of bond issue at increased interest rate Loss on bond issue #N/A #N/A mplied yield at time futures contract entered Vield with increase in interest rates #N/A #N/A alue of 1 futures contract Total value of futures contracts #N/A #N/A Profit on futures contracts, ignoring commissions #N/A Het profit #N/A The Zinn Company plans to issue $10,000,000 of 20-year bonds in June to help finance a new research and development laboratory. The bonds will pay interest semiannually. It is now November, and the current cost of debt to the high-risk biotech company is 11%. However, the firm's financial manager is concerned that interest rates will climb even higher in coming months. The following data are available: Futures Prices: Treasury Bonds - $100,000; Pts. 32nds of 100% Delivery Month Open High Low Settle Change Open Interest (1) (2) (3) (5) (6) (7) Dec 94'28 95'13 94'22 95'05 +0'07 Mar 96'03 96'03 9513 95'25 +0'08 591,944 120,353 13,597 June 95'03 95'17 95'03 95'17 +0'08 The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet a. Use the given data to create a hedge against rising interest rates. Do not round intermediate calculations. Round your answer to the nearest whole number The firm must sell 105 contract(s) to cover the planned $10,000,000 June bond issue. b. Assume that interest rates in general increase by 100 basis points. How well did your hedge perform? (i.e., What is the net gain or loss?) Hint: Use settlement price in your evaluations. A net loss, if any, should be indicated with a minus sign. Use the rounded number of contracts in your calculations. Do not round other intermediate calculations. Round your answer to the nearest dollar. On net, the firm gained (lost) $ 191256.01 Jalue of bond issue next June Maturity of bond issue, in years Frequency of interest paid in year Current annual interest (cost of debt), November Expected increase in interest rate in basis points ncrease in annual interest rate in percentage Maturity of hypothetical bond in futures contract Annual coupon rate of hypothetical bond in futures contrac $10,000,000 20 2 11.00% 100 1.00% 20 6.00% Pts. 32nds of 100% Low Futures Prices: Treasury Bonds Delivery Month (1) Dec Mar June $100,000 Open (2) 94'28 96'03 95'03 High (3) 95'13 96'03 95'17 94'22 9513 95'03 Settle (5) 95'05 95'25 95'17 Change (6) +0'07 +0'08 +0'08 Interest (7) 591,944 120,353 13,597 To protect from rising interest rates, firm must sell futures contracts Vhole percentage of quote 2nds of 100% of quote 95 17 alue of 1 futures contract Number of futures contracts to sell (to the nearest whole) otal value of futures contracts Formulas #N/A #N/A #N/A Determination of how well hedge performed alue of bond issue at increased interest rate Loss on bond issue #N/A #N/A mplied yield at time futures contract entered Vield with increase in interest rates #N/A #N/A alue of 1 futures contract Total value of futures contracts #N/A #N/A Profit on futures contracts, ignoring commissions #N/A Het profit #N/A The Zinn Company plans to issue $10,000,000 of 20-year bonds in June to help finance a new research and development laboratory. The bonds will pay interest semiannually. It is now November, and the current cost of debt to the high-risk biotech company is 11%. However, the firm's financial manager is concerned that interest rates will climb even higher in coming months. The following data are available: Futures Prices: Treasury Bonds - $100,000; Pts. 32nds of 100% Delivery Month Open High Low Settle Change Open Interest (1) (2) (3) (5) (6) (7) Dec 94'28 95'13 94'22 95'05 +0'07 Mar 96'03 96'03 9513 95'25 +0'08 591,944 120,353 13,597 June 95'03 95'17 95'03 95'17 +0'08 The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet a. Use the given data to create a hedge against rising interest rates. Do not round intermediate calculations. Round your answer to the nearest whole number The firm must sell 105 contract(s) to cover the planned $10,000,000 June bond issue. b. Assume that interest rates in general increase by 100 basis points. How well did your hedge perform? (i.e., What is the net gain or loss?) Hint: Use settlement price in your evaluations. A net loss, if any, should be indicated with a minus sign. Use the rounded number of contracts in your calculations. Do not round other intermediate calculations. Round your answer to the nearest dollar. On net, the firm gained (lost) $ 191256.01