You're considering an investment in 12-year, $1,000 face value bonds with a 9.00% coupon paid annually and a yield to maturity of 7.50%. The bonds are callable in four years at a call price of $1,050. If you believe that the bonds will be called how much will you earn?

Select one:

a.

6.73%

b.

7.50%

c.

5.68%

d.

10.08%

e.

7.75%