In early January 2010, you purchased $25,000 worth of somehigh-grade corporate bonds. The bonds carried a coupon of 628% and mature in 2024. You paid 93.483 when you bought the bonds. Over the five years from 2010 through 2014, the bonds were priced in the market asfollows:

Quoted Prices(% of$1,000 parvalue)

Year Beginning of the Year End of the Year Average Holding Period Return

onHigh-Grade Corporate Bonds

2010 93.483 100.845 7.30%

2011 100.845 102.203 11.72%

2012 102.203 105.275 6.89%

2013 105.275 112.377 7.90%

2014 112.377 122.102 9.11%

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

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