With the stock market reflecting extreme volatility during the past few weeks, some individuals are becoming concerned about their equity portfolios and are either considering selling their stocks or have already done so. Many investors are looking for stability and believe the bond market is a safe haven for their money. Using the following information, please compute the investment performance and end of period asset value for the following realistic scenario.

1. A $100,000 investment in a 15 year, AA-rated corporate bond with a 5 percent coupon. Please calculate the annual interest income that you would receive each year, along with the value that you will receive when your bond matures.

2. The 15-year average return for the S&P 500 from January 1973 to December 2016 (29 separate 15 year periods) was as high as a 20% average annual return and as low as a 3.7% average annual return. Additionally, the average dividend yield for the S&P is 4.11% and the average annual dividend growth rate is 6.11%.

3. Using this information you found from the previous 2 questions, please compare the investment in the 5% 15 year corporate bond with a $100,000 investment in a stock with a 3.7% dividend yield (10 percent less than the S&P 500 average yield) and a 3% dividend growth rate (50 percent of the S&P 500 dividend growth rate).