An analyst finds that the semiannual interest rate that equates the present value of the bond’s cash flow to its current market price is 3.85 percent. Consider the following possible alternatives:

I. The bond equivalent yield on this security is 7.70 percent.

II. The effective annual yield on the bond is 7.85 percent.

III. The bond’s yield to maturity is 7.70 percent.

IV. The bond’s horizon return is 8.35 percent. 

Which of these alternatives are true?

a. I and II only

b. II, III, and IV only

c. I, II, and III only

d. III only.