An 8-year 10% Treasury bond is sold to yield j₂ = 14% p.a. Suppose coupon payments reinvested at j₂ = 11% p.a. This Treasury bond's face value of $100 that matures at par.

An investor Zack has purchased this Treasury bond at issuing and sold it 18 months later at yield j₂ = 12.5% p.a. Calculate the holding period rate (HPY) as a j₂ rate. Give your answer as a percentage correct to two decimal places.

Select one:

a. 25.23%

b. 8.96%

c.13.83%

d.17.93%