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 bond with a face value of €1 000 pays an annual coupon of 7% and matures in 8 years. The yield to maturity is 4%. Find the price P of the bond.

F = €1 000coupon = 7%YTM = 4%n = 8

P = €

2.Easy

A zero-coupon bond pays €1 000 in 4 years and nothing before. The yield to maturity is 4.5% per year. Find the price P of the bond.

F = €1 000n = 4YTM = 4.5%

P = €

3.Medium

You buy a bond with 3 years to maturity (face value €1 000, annual coupon 7%) when its yield to maturity is 5%. One year later, just after receiving the first coupon, you sell it when the yield to maturity is 6.5%. Find your holding period return HPR in percent.

F = €1 000coupon = 7%n = 3y₀ = 5%y₁ = 6.5%

HPR = %

4.Medium

A bond with a face value of €1 000 matures in 11 years and pays annual coupons. It sells for €1 249 when the yield to maturity is 5%. Find the coupon rate c in percent.

F = €1 000n = 11P = €1 249YTM = 5%

c = %

5.Hard

A bond with a face value of €1 000 and an annual coupon of 8% matures in 8 years and sells for €1 125. Find its yield to maturity YTM in percent.

F = €1 000coupon = 8%n = 8P = €1 125

YTM = %

6.Hard

A bond with a face value of €1 000 pays a 5% annual coupon in two half-yearly payments and matures in 8 years. It sells for €937. Find its yield to maturity YTM as an annual rate (twice the half-yearly yield), in percent.

F = €1 000coupon = 5% (2×)n = 8P = €937

YTM = %

Answer key

1. P = 1202 €
2. P = 838.6 €
3. HPR = 2.337 %
4. c = 7.998 %
5. YTM = 5.988 %
6. YTM = 6.003 %

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