Please answer with explanation, thanks. In early January 2010, you purchased $22,000 worth of some high-grade corporate bonds.

Please answer with explanation, thanks.

In early January 2010​, you purchased ​$22,000 worth of some​ high-grade corporate bonds. The bonds carried a coupon of

—-6

—-8

and mature in 2024. You paid 95.042 when you bought the bonds. Over the five years from 2010 through 2014 the bonds were priced in the market as​ follows:

Qoted price (%of 1000 par value)

Year———Beginning of the year—————-End of year——-Average period on high-grade corporation bond

2010————–95.042—————————–101.226—————————7.30%

2011————–101.226—————————-103.485————————–11.72%

2012————–103.485—————————-108.094————————-(-6.89%)

2013————–108.094—————————-114.338————————–7.90%

2014————–114.338—————————-125.359————————–9.11%

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?

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