What is the rate of return on each bond

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Reference no: EM131525720

One bond has a coupon rate of 7.0%, another a coupon rate of 9.0%. Both bonds pay interest annually, have 5-year maturities, and sell at a yield to maturity of 8.0%. a. If their yields to maturity next year are still 8.0%, 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.) Rate of return Bond 1 % Bond 2 % b. Does the higher-coupon bond give a higher rate of return? Yes No

Reference no: EM131525720

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