A $1,000 par value bond with 10 years to maturity pays a coupon rate of 5%, annually. The bond's yield to maturity is 5.4% per year. You expect the bond's yield to maturity in two years will be 4.5% per year and you can reinvest the bond's coupon payments over the next two years in short-term securities that pay 3.0% per year. What is the expected annual return on the bond over the next two years? (Hard, but the same as the PPT example) 1) 8.02% 2) 8.16% 3) 8.24% 4) 8.42% 5) 8.66%