Default Risk

Go to the Bond Center of Yahoo! Finance (http://finance.yahoo.com/bonds) and find the bonds that are outstanding for Disney Corporation by using the Bond Lookup feature. How many bonds does Disney have outstanding? What is the range of maturity dates? (You can sort by any of the items listed by clicking on the column heading.) What is the range of coupon rates? Do all of the bonds have the same rating? Which bonds, if any, are callable? Click on the link for the first bond to see more information about the issue. How frequently are the coupon payments made for this issue? Answer the same question for all of the other Disney bonds. Are there any surprises? Repeat this exercise to investigate the bonds of Charter Communications.

Credit Spreads

At www.bondsonline.com review the Industrial Spreads for various ratings (click the links on the left-side menus to follow the links to Today's Markets, Corporate Bond Spreads). These are spreads above U.S. Treasuries of comparable maturities. What factors tend to explain the yield differences? How might these yield spreads differ during an economic boom versus a recession?

From the home page, select Today's Markets from the left-side menu and then select the link for Composite Bond Yields. How do the Yield Curves for Treasury, Agency, Corporate, and Municipal bonds compare to each other?