Last year, you purchased a $1,000 par value bond with a 7.5% annual coupon and a 20-year maturity. At the time of the purchase, it had an expected YTM of 7%. After receiving the coupon, you sold the bond today for $1005. What is your return rate in one year? (Hint: find out how much did you pay for the bond last year?)

Select one:

a.12.75%

b.10.64%

c.3.37%

d.5.89%

e.2.57%