One bond has a coupon rate of 8%, another coupon rate of 12%. Both bonds pay interest

Question:

One bond has a coupon rate of 8%, another coupon rate of 12%. Both bonds pay interest annually, have 10-year maturities, and sell at a yield to maturity of 10%.

a. If their yields to maturity next year are still 10%, what is the rate of return on each bond?

b. Does the higher-coupon bond give a higher rate of return?

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...