In early January 2010

2010, you purchased $10 comma 000

10,000 worth of somehigh-grade corporate bonds. The bonds carried a coupon of 7 font size decreased by 1 font size decreased by 1 font size decreased by 1 six eighths %

768% and mature in 2024

2024. You paid 97.116

97.116 when you bought the bonds. Over the five years from 2010

2010 through 2014

2014, the bonds were priced in the market asfollows: LOADING...

. Coupon payments were made on schedule throughout the5-year period.

a. Find the annual holding period returns for 2010

2010 through 2014

2014. (See Chapter 5 for the HPRformula.)

b. Use the average return information in the given table to evaluate the investment performance of this bond. How do you think it stacks up against themarket? Explain.

a. The holding period return for 2010

2010 is

nothing

%. (Round to two decimalplaces.)

The holding period return for 2011

2011 is

nothing

%. (Round to two decimalplaces.)

The holding period return for 2012

2012 is

nothing

%. (Round to two decimalplaces.)

The holding period return for 2013

2013 is

nothing

%. (Round to two decimalplaces.)

The holding period return for 2014

2014 is

nothing

%. (Round to two decimalplaces.)

b. Use the average return information in the given table to evaluate the investment performance of this bond. How do you think it stacks up against themarket? Explain.(Select the best choicebelow.)

Thehigh-grade corporate bond investment has outperformed the market. The average rate of return for the investment is 13.06

13.06% versus the average market rate of 5.83

5.83%.

The market has outperformed the corporate bond investment. The average rate of return for the investment is 5.83

5.83% versus the average market rate of 13.06

13.06%.