nine years ago the

Nine years ago the Templeton Company issued 28-year bonds with a 12% annual coupon rate at their $1,000 par value. The bonds had alremium with 5 years of call protection. Today Templeton called the bonds. Compue the realized rate of return for an investor who purchased the bonds when they were issued and held them with they were 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 called, Investors will no longer need to consider investment rate II. Investors should not be happy. Since the bonds have been called, Interest rates must have fallen ently such that the YC is less than the Testors wish to reinvest their interest receipts, they must do so at lower interest rates III. Investors should be happy. Since the bonds have been called, Interest rates must have risen sufficiently such that the YTC is greater than the YTH. Investors wat reinvest their interest receipts, they can now do so at higher interest rates IV. Investors should be happy. Since the bonds have been called, Investors will receive a call premium and condectare a capital gain on their tax return