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Six years ago the Templeton Company issued 20-year bonds with a13% annual coupon rate at their $1,000 par value. The bonds had an8% call premium, with 5 years of call protection. Today Templetoncalled the bonds. Compute the realized rate of return for aninvestor who purchased the bonds when they were issued and heldthem until they were called. Round your answer to two decimalplaces.%Why should or should not the investor be happy that Templetoncalled them?Investors should be happy. Since the bonds have been called,investors will no longer need to consider reinvestment raterisk.Investors should not be happy. Since the bonds have beencalled, interest rates must have fallen sufficiently such that theYTC is less than the YTM. If investors wish to reinvest theirinterest receipts, they must do so at lower interest rates.Investors should be happy. Since the bonds have been called,interest rates must have risen sufficiently such that the YTC isgreater than the YTM. If investors wish to reinvest their interestreceipts, they can now do so at higher interest rates.Investors should be happy. Since the bonds have been called,investors will receive a call premium and can declare a capitalgain on their tax returns.