Ten years ago the Templeton Company issued 26 -year bonds with a 9% annual coupon rate ot their $1,000 par value, The bonds had a 6% eall premium, with 5 years of cal protection. Today Templeton called the bonds. Compute the realized rate of retuin for an investor who purchaved the bonds when they were issued and 1 eld them unitf they were called. Round your answer to two decimal places. Why should ar should not the investor be happy that Templeton called them? 1. Investors should be happy. Since the bonds have been called, investors will recelve a call premium and can declace a captai gain on their tax coturns. 11. Investors should be happy. Since the bonds have been called, investors will ne longer need to consider reinvestment rate risk. III. Investors should not be happy. Since the bonds have been caled, interest fates must have fallen sufficiently such viat the Yrc is less than the rTM. if investors wish to reinvest their interest receints, they must do so at lawer interest rates. reirwest their interest recelpts, they can how do so at higher interest rates