One bond has a coupon rate of 6.8%, another a coupon rate of 8.4%. Both bonds pay interest annually, have 8-year maturities, and sell at a yield to maturity of 7.0%.

If their yields to maturity next year are still 7.0%, what is the rate of return on each bond?

Rate of return Bond 1= 7.0

Rate of return Bond 2=?

Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 1 decimal place.

Does the higher-coupon bond give a higher rate of return over this period?