You are evaluating the following bond investments. Both bonds pay $1,000 at maturity. Bond 1 has a three-year maturity, pays a 5% annual coupon, and is A-rated. Bond 1s yield to maturity is 6%, the 90-day Treasury bill rate is 0.5%, and the 10-year Treasury bond rate is 2.2%. Bond 2 has a five-year maturity, pays an 8% annual coupon, is BB-rated, and the price is reported in todays Wall Street Journal at 102.

a. What is the yield to maturity of Bond 2?

b. You must identify which bond (Bond 1 or Bond 2) was the greater interest-rate risk. How can we best identify which of these bonds (Bond 1 or Bond 2) has the greater interest-rate risk? No calculations necessary. Use no more than 25 words.