In early January 2010, you purchased $30,000 worth of some high-grade corporate bonds. The bonds carried a coupon of and mature in 2024. You paid a price of 94.125 when you bought the bonds. Over the five years from 2010 through 2014, the bonds were priced in the market as follows:

______________________Quoted Prices (% of $1,000 par value)

Year ______Beginning of the Year ____________End of the Year

2010 .................. 94.125 ................................... 100.625

2011 ................. 100.625 ................................... 102.000

2012 ................. 102.000 ................................... 104.625

2013 ................. 104.625 ................................... 110.125

2014 ................. 110.125 ................................... 121.250

Coupon payments were made on schedule throughout the five-year period.

a. Find the annual holding period returns for 2010 through 2014.

b. Use the return information in Table 10.1 to evaluate the investment performance of this bond. How do you think it stacks up against the market? Explain.

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