Seven years ago the Templeton Compary issued 29 -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 purchasad the bonds when they were issued and held them unti they were calied. Round your answer to two decimal places. Why should or sheuld not the investor be hapoy that fempleton called them? 1. Anvestors should be happy. Since the bonds have been called, investors wil receive a call premium and can declare a capital pain on their tax returns. II. Investors should be happy. Since the bends have been called, investors wil no longer need to censider reinvestment rate riak. II. Investors should not be happy, Since the bonds have been called, interest rates must have falten sufhiciently such that the YTC is less than the rTM. If investors wish to reinvest their interest rocelpts, they must do so at lower interest rates. IV. Investors should be fuppy. Since the bonds have been called, interest ntes must have risen sufficiently such that the YTC is greater than the YTM, If imvestors wish to relinvest their interest receipts, they can now do so at higher interest rotes