In early January 2014, you purchased $100,000 worth of some high-grade corporate bonds. The bonds carried a

Question:

In early January 2014, you purchased $100,000 worth of some high-grade corporate bonds. The bonds carried a coupon of 6% and mature in 2027. You paid a price of 102.625 when you bought the bonds. Over the five years from 2014 through 2018, the bonds were priced in the market as follows:

Annual coupon payments were made on schedule throughout the five-year period.
a. Find the annual holding period returns for 2014 through 2018. (See Chapter 4 for the HPR formula.)
b. Use the return information in Table 10.1 to evaluate the investment performance of this bond. How do you think it stacks up against the market? Explain.

Fantastic news! We've Found the answer you've been seeking!