eBook Seven years ago the Templeton Company issued 25-year bonds with an 11% annual coupon rate at their $1,000 par value. The bonds had a 7.9% 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 wtre called. Round your answer to two decimal places Why should or should not the investor be happy that Templeton called them? 1. Investors should be happy. Since the bonds have been cate, interest rates must have risen sufficiently such that the YTC is greater than the YTH. IT Investors wish to reinvest their interest receipts, they can now do so at higher interest rates 11. Investors should be happy. Since the bonds have been called, Investors will receive a call premium and can declare a capital gain on their tax return. III. Investors should be happy. Since the bonds have been calied, investors will no longer need to consider reinvestment rate nisk, IV. Investors should not be happy. Since the bonds have been called, Interest rates must have fallen sufficiently such that the YTC is less than the YT. IN Investors wish to reinvest their interest receipts, they must do so at lower interest rates IV