1.Go to the website of Standard & Poors at www.standardandpoors.com. Look for Rating Services (Find a Rating). Find the ratings on bonds of at least 10 companies. Try to choose a sample with a wide range of ratings. Then go to a website such as money.msn.com or finance.yahoo.com and obtain, for each firm, as many of the financial ratios tabulated in Table 10.3 as you can find. What is the relationship between bond rating and these ratios? Can you tell from your sample which of these ratios are the more important determinants of bond rating?

2.The FINRA operates the TRACE (Trade Reporting and Compliance Engine) system, which reports over-the-counter secondary market trades of fixed-income securities. Go to the FINRA home page at www.finra.org and click on the link for Industry Professionals. Search (located at the top right) for the TRACE Fact Book and click the first link that appears. Find the detailed data tables and locate the table with information on issues, excluding convertible bonds (typically Table 1). For each of the last three years, calculate the following:

a.The percentage of bonds that were publicly traded and the percentage that were privately traded.

b.The percentage of bonds that were investment grade and the percentage that were high-yield.

c.The percentage of bonds that had fixed coupon rates and the percentage that had floating rates.

d.Do any patterns emerge over time?

e.Repeat the calculations using the information for convertible bond issues (typically in Table 2).