Two U.S. Treasury bills will mature in 1 year from today.
- Bond #1 pays $102.34 per $100 of face value.
- Bond #2 pays $104.34 per $100 of face value.

Which bond (#1 or #2) pays out at a higher return to the buyer?
A. Bond #2 pays a higher return than Bond #1.
B. Bond #2 pays a lower return than Bond #1.
C. Bond #1 pays a higher return than Bond #2.
D. Bonds #1 & #2 each provide the same rate of return to the buyer as prices adjust to equalize returns.
E. James Bond is paid the most, but he won't live long enough to enjoy it.