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Please answer all parts. In early January 2010, you purchased $40,000 worth of some high-grade corporate bonds. The bonds carried a coupon of 92% and
Please answer all parts.
In early January 2010, you purchased $40,000 worth of some high-grade corporate bonds. The bonds carried a coupon of 92% and mature in 2024. You paid 91.538 when you bought the bonds. Over the five years from 2010 through 2014, the bonds were priced in the market as follows: E. Coupon payments were made on schedule throughout the 5-year period. a. Find the annual holding period returns for 2010 through 2014. (See Chapter 5 for the HPR formula.) 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 16.54 %. (Round to two decimal places.) i Data Table (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Year 2010 2011 2012 2013 2014 Quoted Prices (% of $1,000 par value) Beginning End of of the Year the Year 91.538 97.425 97.425 99.681 99.681 103.468 103.468 110.576 110.576 123.013 Average Holding Period Return on High-Grade Corporate Bonds 7.30% 11.72% -6.89% 7.90% 9.11%Step by Step Solution
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