In early January 2010, you purchased $38,000 worth of some high-grade corporate bonds. The bonds carried a coupon of 9 3/8% and mature in 2024.You paid 91.782 when you bought the bonds. Over the five years from 2010 through 2014, the bonds were priced in the market as follows: (picture)

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.

U Year 2010 2011 2012 2013 2014 Quoted Prices (% of $1,000 par value) Beginning End of of the Year the Year 91.782 99.343 99.343 101.647 101.647 103.469 103.469 107.882 107.882 118.031 Average Holding Period Return on High-Grade Corporate Bonds 7.30% 11.72% -6.89% 7.90% 9.11%