USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM The following information is given concerning a substitution swap. You currently hold a 25-year, Aa 10-percent coupon bond priced to yield 12 percent. As a swap candidate, you are considering a 25-year, Aa 10 percent coupon bond priced to yield 13 percent. Assume a reinvestment rate of 12 percent, semiannual compounding, and a one-year workout period.

	Current Bond	Candidate Bond
Dollar Investment	$842.38	?
Coupon	100.00	100.00
i on One Coupon	3.0	2.75
Principal Value at Year End	843.50	780.46
Total Accrued	946.50	883.21
Total Gain	104.12	?
Gain per Invested Dollar	?	?
Realized Compound Yield	?	?

Refer to Exhibit 13.9. The realized compound yield on the current bond is

a. 13.9399%.

b. 10.00%.

c. 12.3585%.

d. 11.9985%.

e. 12.9397%.