Currently, the term structure is as follows: One$-$year bonds yield $8\mathrm{.}75\%,$ two$-$year zero$-$coupon bonds yield $9\mathrm{.}75\%,$ three$-$year and longer maturity zero$-$coupon bonds all yield $10\mathrm{.}75\%.$ You are choosing between one, two, and three$-$year maturity bonds all paying annual coupons of $9\mathrm{.}75\%.$ You strongly believe that at year$-$end the yield curve will be flat at $10\mathrm{.}75\%.$

Required:

a$.$ Calculate the one year total rate of return for the three bonds. $($Do not round intermediate calculations. Round your answers to $2$ decimal places.$)$

b$.$ Which bond you would buy?

multiple choice

One$-$year bond

Two$-$year bond

Three$-$year bond