In early January 2010, you purchased $28,000 worth of some high-grade corporate bonds. The bonds carried a coupon of

678% and mature in 2024. You paid 96.989 when you bought the bonds. Over the five years from 2010 through 2014,

the bonds were priced in the market as follows: (photo)

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.

coupon rate is 6 7/8 %

Year 2010 2011 2012 2013 2014 Quoted Prices (% of $1,000 par value) Beginning End of of the Year the Year 96.989 104.094 104.094 106.476 106.476 111.179 111.179 118.406 118.406 131.446 Average Holding Period Return on High-Grade Corporate Bonds 7.30% 11.72% -6.89% 7.90% 9.11%