Question

One bond has a coupon rate of 6.0%, another a coupon rate of 8.5%. Both bonds pay interest annually, have 12-year

maturities, and sell at a yield to maturity of 7.0%. a. If their yields to maturity next year are still 7.0%, what is the rate of return on each bond? (Do not round intermediate calculations. Enter your answers as a percent rounded to 1 decimal place.) With instructions in very basic form please.

Rate of return:

Bond 1 :

Bond 2 :

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