2. (10 points) In recent years the irradiation of food to reduce bacteria and preserve the food longer has become more common. A company that performs this service has developed four different methods of irradiating food. To determine which is best, it conducts an experiment where different foods are irradiated, and the bacteria count is measured. As part of the experiment the following foods are irradiated: beef, chicken, turkey, eggs, and milk. The results are shown below. Food Beef Chicken Turkey Eggs Milk Bacteria Count Method 1 Method 2 47 53 61 1 68 85 25 24 44 48 53 Method 3 36 48 55 20 38 Method 4 68 75 45 27 46 7-8 YIELD TO CALL Seven years ago the Templeton Company issued 20-year bonds with an 11% annual coupon rate at their $1,000 par value. The bonds had a 7.5% call premium, with 5 years of call protection. Today Templeton called the bonds. Compute the realized rate of return for an investor who purchased the bonds when they were issued and held them until they were called. Explain why the investor should or should not be happy that Templeton called them. 2. (10 points) In recent years the irradiation of food to reduce bacteria and preserve the food longer has become more common. A company that performs this service has developed four different methods of irradiating food. To determine which is best, it conducts an experiment where different foods are irradiated, and the bacteria count is measured. As part of the experiment the following foods are irradiated: beef, chicken, turkey, eggs, and milk. The results are shown below. Food Beef Chicken Turkey Eggs Milk Bacteria Count Method 1 Method 2 47 53 61 1 68 85 25 24 44 48 53 Method 3 36 48 55 20 38 Method 4 68 75 45 27 46 7-8 YIELD TO CALL Seven years ago the Templeton Company issued 20-year bonds with an 11% annual coupon rate at their $1,000 par value. The bonds had a 7.5% call premium, with 5 years of call protection. Today Templeton called the bonds. Compute the realized rate of return for an investor who purchased the bonds when they were issued and held them until they were called. Explain why the investor should or should not be happy that Templeton called them