II(2) Suppose that you are comparing two five-year bonds with a face value of $1000, and are expecting a drop in yield rate i of 1% almost immediately. The current yield rate i is 8%. Bond 1 has 6% annual coupons and bond 2 has annual 12% coupons. You would like to invest $100, 000 in the bond giving you the biggest return. (i) Which would provide you with the highest potential gain if your outlook for rates actually occurs (that is, i really decreases from 8% to 7% )? (ii) Find the Macaulay duration of each bond in case i = 8%. [8 points]