Q1. The Allied Waste bond has a ___________coupon rate (also referred to as the stated rate or

Question:

Q1. The Allied Waste bond has a rate (also referred to as the stated rate or the face rate) that determines the (___________ / effective interest rate). An investor/creditor holding a $100,000 Allied Waste bond will receive ___________ in interest payments each year.
Q2. The Allied Waste bond is currently rated a B+ and returning an ___________yield,
Whereas the Trump AC bond is rated ___________and returning a ___________ yield.
The CCC+ rating indicates (___________/ less) financial risk than a B+ rating. Therefore, to attract investors/creditors the Trump AC bond must offer a (___________/ lower) rate of return (yield).
Q3. An investor/creditor purchasing the Allied Waste bond is expecting an ___________annual return. Assuming investments with the same amount of risk, an investor/creditor would prefer a (___________/ low) yield while the issuing would prefer a (high / ___________) yield.
Q4. The amount paid by the issuing at is referred to as the the par value, and the value. Bond bid (selling) price is quoted as a percentage of par.
For example, the Bid Price of the Allied Waste bond is 104.50. This indicates an investor/creditor could purchase or sell a $100,000 Allied Waste bond for $104,500. ($100,000 x 104.50%). This bond is selling at a (___________/ par / discount).
A $100,000 Trump AC bond would sell for ___________. This bond is selling at a (premium / par / ___________).
Q5. The Allied Waste bond is selling at a premium because the rate (stated rate, face rate) is (___________/ less than) the yield (market rate, effective rate) for this investment. To achieve the (higher / ___________) yield, the investor/creditor pays the issuing an additional amount (premium) at the beginning of the investment.
The Trump AC bond is selling at a discount because the rate (stated rate, face rate) is (greater than / ___________) the yield (market rate, effective rate) for this investment. To achieve the (higher / ___________) yield, the initial investment of the investor/creditor is less than (discount) and at the higher is received.
Q6. Would you prefer to invest in the Allied Waste or the Trump AC bond? Why?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...