For the first question, the options are: an investment-grade bond, an income bond, or an asset-backed bond.

Aa Aa E. 2. The return on bonds of varying risk Read each description that follows and identify the type of bond being described. Bond A Bond B Bond A is judged by its rating agency as being Bond B promises to pay its interest only if the likely to pay its interest and maturity obligations issuing firm earns sufficient income. on time. This is This is Assume that Wellington Industries will issue either bond A or bond Bin 90 days. The issues are identical except for their coupon rates and the characteristics described previously. Which bond should carry the higher coupon rate? O Bond A O Bond B National Transmissions Corp. is considering a new bond issue. While holding discussions with the company's bond underwriter, the CFO of National Transmissions suggested adding a call provision to the issue's indenture. Everything else remaining constant, this change would be expected to the coupon rate on the bond issue and decrease prospective bondholders' risk exposure risk exposure or operational burden on National Transmissions