One bond has a coupon rate of 8.2%, another a coupon rate of 9.6%. Both bonds pay interest annually, have 13-year maturities, and sell at a yield to maturity of 8.5%.

a. If their yields to maturity next year are still 8.5%, what is the rate of return on each bond? (Do not round intermediate calculations. Enter your answers as a percent rounded to 1 decimal place.)

Rate of return

Bond 1 %

Bond 2 %

b. Does the higher-coupon bond give a higher rate of return? Yes No