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 8 years and costs €677 today. Find its yield to maturity YTM in percent.

F = €1 000n = 8P = €677

YTM = %

2.Easy

A bond with a face value of €1 000 pays an annual coupon of 3% and matures in 3 years. The yield to maturity is 3.5%. Find the price P of the bond.

F = €1 000coupon = 3%YTM = 3.5%n = 3

P = €

3.Medium

You buy a bond with 4 years to maturity (face value €1 000, annual coupon 2%) when its yield to maturity is 2.5%. One year later, just after receiving the first coupon, you sell it when the yield to maturity is 4%. Find your holding period return HPR in percent.

F = €1 000coupon = 2%n = 4y₀ = 2.5%y₁ = 4%

HPR = %

4.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 8% per year. Find the price P of the bond.

F = €1 000coupon = 5%YTM = 8%n = 4

P = €

5.Hard

A bond with 15 years to maturity (face value €1 000, annual coupon 8%) sells for €1 091. The issuer can call it in 3 years at a call price of €1 080. Find the yield to call YTC in percent.

F = €1 000coupon = 8%P = €1 091call price = €1 080call in 3 years

YTC = %

6.Hard

A bond with a face value of €1 000 and an annual coupon of 4% matures in 7 years and sells for €1 130. Find its yield to maturity YTM in percent.

F = €1 000coupon = 4%n = 7P = €1 130

YTM = %

Answer key

1. YTM = 4.997 %
2. P = 986 €
3. HPR = −1.701 %
4. P = 899 €
5. YTC = 7.019 %
6. YTM = 1.992 %

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