Bond pricing & yield worksheet with answers

Free printable Bond pricing & yield worksheet: 6 problems from easy to exam level, with an answer key. Print it or save it as a PDF.

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1.Easy

A zero-coupon bond with a face value of €1 000 matures in 15 years and costs €623 today. Find its yield to maturity YTM in percent.

F = €1 000n = 15P = €623

YTM = %

2.Easy

A zero-coupon bond pays €1 000 in 16 years and nothing before. The yield to maturity is 6% per year. Find the price P of the bond.

F = €1 000n = 16YTM = 6%

P = €

3.Medium

A bond with a face value of €1 000 pays a 5% annual coupon in two half-yearly payments and matures in 4 years. The yield to maturity is 3% per year. Find the price P of the bond.

F = €1 000coupon = 5%YTM = 3%n = 4

P = €

4.Medium

A bond with a face value of €1 000 matures in 11 years and pays annual coupons. It sells for €929 when the yield to maturity is 8%. Find the coupon rate c in percent.

F = €1 000n = 11P = €929YTM = 8%

c = %

5.Hard

A bond with a face value of €1 000 pays a 4.5% annual coupon in two half-yearly payments and matures in 5 years. It sells for €1 093. Find its yield to maturity YTM as an annual rate (twice the half-yearly yield), in percent.

F = €1 000coupon = 4.5% (2×)n = 5P = €1 093

YTM = %

6.Hard

A bond trades at €1 100 with a yield to maturity of 7% (annual compounding) and a Macaulay duration of 6.5 years. Use the modified duration to estimate the new price P if the yield falls by 50 basis points.

P₀ = €1 100y = 7%D = 6.5Δy = −50 bp

P = €

Answer key

1. YTM = 3.205 %
2. P = 393.6 €
3. P = 1075 €
4. c = 7.005 %
5. YTM = 2.509 %
6. P = 1133 €

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