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 $14\%.$ 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$; Pts$.32$nds of $100\%$

Delivery Month Open High Low Settle Change Open Interest

$(1)(2)(3)(4)(5)(6)(7)$

Dec $94\text{'}28095\text{'}13094\text{'}22095\text{'}050+0\text{'}070591,944$

Mar $96\text{'}03096\text{'}03095\text{'}13095\text{'}250+0\text{'}080120,353$

June $95\text{'}03095\text{'}17095\text{'}03095\text{'}170+0\text{'}08013,597$

What is the implied yield on the June futures contract $($$$100,000$ par value, $6\%$ coupon, semiannual payment with $20$ years to maturity$)?$ Do not round intermediate calculations. Round your answer to two decimal places.

$\%$

How many futures contracts will be needed to hedge potential losses in bond proceeds $($based on current market conditions$)$ due to waiting? Round your answer up to the nearest whole number.

The firm must

$-$Select$-$

contract$($s$)$ to cover the planned $$10,000,000$ June bond issue.

What is the total value of the hedge position? Use the rounded value of the number of contracts. Round your answer to the nearest cent.

$

Assume that interest rates in general increase by $300$ basis points. Suppose the bond's terms don't change and that the coupon rate is still $14\%.$ How much would Zinn receive from the bond issue given the new market rates? Do not round intermediate calculations. Round your answer to the nearest cent.

$

How much less is this than the original target for proceeds? Do not round intermediate calculations. Round your answer to the nearest cent. Enter your answer as a positive value.

$

Assume that Zinn had entered the hedge found in part a$.$ What is the new price of the hedge position? Use the rounded value of the number of contracts from part a$.$ Do not round other intermediate calculations. Round your answer to the nearest cent.

$

What is the gain on the hedge? Use the rounded value of the number of contracts from part a$.$ Do not round other intermediate calculations. Round your answer to the nearest cent.

$

What is the net effect of the loss of proceeds and the gain on the hedge? Use the rounded value of the number of contracts from part a$.$ Do not round other intermediate calculations. Round your answer to the nearest cent. Enter your answer as a positive value.

On net, the firm

$-$Select$-$

$

$.$