Suppose you purchase a ten-year bond with 6% annual coupons. You hold the bond for four years, and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was 4.5% when you purchased and 7% when you sold the bond. What is your annual rate of return on the bond in each of the following situations:

a) All coupons were immediately spent when received.

b) All coupons were reinvested in a bank account, which pays 2 percent interest until the bond is sold.