You purchase today a callable annual coupon rate bond under the following conditions: Bond characteristics:

Coupon rate: 7.5%

Maturity of bond: 20 years

Call Premium: 8% Time to call period: 4 years

Current YTM: 8.5%

Expected hold assumptions:

Expected hold time: 4 years

Reinvestment rate (average money market return): 2.1%

Expected YTM (non-callable bonds) at sale: 4.0%

Based upon the above items, find the Horizon Yield (HY) for this bond position.