A $1,000 par value bond with 20 years to maturity pays a coupon rate of 10%, annually. The bond's yield to maturity is 9.0% per year. You expect the bond's yield to maturity in two years will be 8.0% per year and you can reinvest the bond's coupon payments over the next two years in short-term securities that pay 7.0% 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) 12.89% 2) 12.46% 3) 13.04% 4) 13.22% 5) 13.66%