In early January 2010, you purchased $24,000 worth of some high-grade corporate bonds. The bonds carried a coupon of 5 5/8% and mature in 2024 . You paid 93.785 when you bought the bonds. Over the five years from 2010 through 2014, the bonds were priced in the market as? follows:

Quoted Prices

Year Beginning or the Year End of the Year Average Holding Period Return on High-Grade Corporate Bonds

2010 93.785 100.756 7.30

2011 100.756 102.313 11.72 2012 102.313 104.451 -6.89

2013 104.451 109.268 7.90 2014 109.268 121.668 9.11

Coupon payments were made on schedule throughout the 5-year period.

a.Find the annual holding period returns for 2010 through 2014 .

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 the? market? Explain.

a. The holding period return for 2010 is ____ %. (Round to two decimal? places.)

The holding period return for 2011 is ____________%. (Round to two decimal? places.)

The holding period return for 2012 is_____ %. (Round to two decimal? places.)

The holding period return for 2013 is ___ %. (Round to two decimal? places.)

The holding period return for 2014 is _____ %. (Round to two decimal? places.)

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 the market? Explain.

(Select the best answer below.)

The high-grade corporate bond investment has outperformed the market.The average rate of return for the investment is 10.81 % versus the average market rate of 5.83 %.

The market has outperformed the corporate bond investment. The average rate of return for the investment is 5.83% versus the average market rate of 10.81 %. .