Dahlia Owns $100,000 in Fuchsia Bonds

Dahlia owns $100,000 in Fuchsia bonds.The interest rate on the bonds is a 4% yearly rate.She exchanges these bonds for $60,000 in Fuchsia bonds paying a 6% yearly rate and $40,000 in Fuchsia preferred stock with a 4% dividend.How is this transaction treated for tax purposes?

A) All of this transaction is taxable.
B) Only the exchange of the bond for the preferred stock is a taxable transaction.
C) Only the exchange of the 4% bond for a 6% is taxable because the interest rate increased.
D) None of the transaction is taxable because it qualifies as a "Type E" reorganization.
E) None of the above.