Please compute formulas on spreadsheet and answer A, B, C

Excel Online Structured Activity: Hedging 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 10%. 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) (4) (5) (6) (7) Dec 94'28 95'13 94'22 95'05 +0'07 591,944 Mar 96'03 96'03 95'13 95'25 +0'08 120,353 June 95'03 95'17 9503 95'17 +0'08 13,597 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. THE 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 contract(s) to cover the plan $10,000,000 Jur bond issue. b. Assume that interest rates in general increase by 300 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) $ c. Choose the correct description of the perfect hedge? Are any real-world hedges perfect? B D E F G 1 Hedging $10,000,000 20 6 10.00% 300 3.00% 20 6.00% $100,000 Open (2) 94'28 96'03 95'03 High (3) 95'13 96'03 95'17 Pts. 32nds of 100% Low (4) 9422 95'13 95'03 Settle (5) 95'05 9525 95'17 Change (6) +0'07 +0'08 +0'08 Interest (7) 591,944 120.353 13.597 Value of bond issue next June Maturity of bond issue, in years 5 Frequency of interest paid in year Current annual interest (cost of debt), November 7 Expected increase in interest rate in basis points 8 Increase in annual interest rate in percentage 9 Maturity of hypothetical bond in futures contract 10 Annual coupon rate of hypothetical bond in futures contract 11 12 Futures Prices: Treasury Bonds Delivery Month 13 (1) 14 Dec 15 Mar 16 June 17 To protect from rising interest rates, firm must sell futures 18 contracts 19 Whole percentage of quote 20 32nds of 100% of quote 21 22 Value of 1 futures contract 23 Number of futures contracts to sell (to the nearest whole) 24 Total value of futures contracts 25 26 Determination of how well hedge performed 27 Value of bond issue at increased interest rate 28 Loss on bond issue 29 30 Implied yield at time futures contract entered 31 Yield with increase in interest rates 32 33 Value of 1 futures contract 34 Total value of futures contracts 35 36 Profit on futures contracts, ignoring commissions 37 38 Net profit 39 95 17 Formulas #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Excel Online Structured Activity: Hedging 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 10%. 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) (4) (5) (6) (7) Dec 94'28 95'13 94'22 95'05 +0'07 591,944 Mar 96'03 96'03 95'13 95'25 +0'08 120,353 June 95'03 95'17 9503 95'17 +0'08 13,597 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. THE 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 contract(s) to cover the plan $10,000,000 Jur bond issue. b. Assume that interest rates in general increase by 300 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) $ c. Choose the correct description of the perfect hedge? Are any real-world hedges perfect? B D E F G 1 Hedging $10,000,000 20 6 10.00% 300 3.00% 20 6.00% $100,000 Open (2) 94'28 96'03 95'03 High (3) 95'13 96'03 95'17 Pts. 32nds of 100% Low (4) 9422 95'13 95'03 Settle (5) 95'05 9525 95'17 Change (6) +0'07 +0'08 +0'08 Interest (7) 591,944 120.353 13.597 Value of bond issue next June Maturity of bond issue, in years 5 Frequency of interest paid in year Current annual interest (cost of debt), November 7 Expected increase in interest rate in basis points 8 Increase in annual interest rate in percentage 9 Maturity of hypothetical bond in futures contract 10 Annual coupon rate of hypothetical bond in futures contract 11 12 Futures Prices: Treasury Bonds Delivery Month 13 (1) 14 Dec 15 Mar 16 June 17 To protect from rising interest rates, firm must sell futures 18 contracts 19 Whole percentage of quote 20 32nds of 100% of quote 21 22 Value of 1 futures contract 23 Number of futures contracts to sell (to the nearest whole) 24 Total value of futures contracts 25 26 Determination of how well hedge performed 27 Value of bond issue at increased interest rate 28 Loss on bond issue 29 30 Implied yield at time futures contract entered 31 Yield with increase in interest rates 32 33 Value of 1 futures contract 34 Total value of futures contracts 35 36 Profit on futures contracts, ignoring commissions 37 38 Net profit 39 95 17 Formulas #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A