1. Which of the following one-year coupon bonds has the highest rate of return?

A. A bond with face value of $1,500, price equal to $1,000, and the coupon payment of $500.

B. A bond with face value of $15,000, price equal to $10,000, and the coupon payment of $5,000.

C. A bond with face value of $150, price equal to $100, and the coupon payment of $50.

D. All above have the same rate of return.

2. What is the yield to maturity of a coupon bond if it sells for $5000 today and matures in 10 years. In addition, you will receive a fixed payment of $100 every year and the face value of $5000 at the maturity date.

A. 2 percent

B. 10 percent

C. 11 percent

D. 12 percent