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:

Delivery month	Open	High	Low	Settle	Change	Open Interest
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	95'03	95'17	+0'08	13,597

Use the given data to create a hedge against rising interest rates.

Assume that interest rates in general increase by 200 basis points. How well did your hedge perform?

What is a perfect hedge? Are any real-world hedges perfect? Explain.