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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Name: ____________________ Date: ____________

1.Easy

A bond with a face value of €1 000 pays an annual coupon of 8% and matures in 3 years. The yield to maturity is 5%. Find the price P of the bond.

F = €1 000coupon = 8%YTM = 5%n = 3

P = €

2.Easy

A bond with a face value of €1 000 pays an annual coupon of 4.5% and matures in 6 years. The yield to maturity is 8%. Find the price P of the bond.

F = €1 000coupon = 4.5%YTM = 8%n = 6

P = €

3.Medium

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

F = €1 000coupon = 4%YTM = 5%n = 3

P = €

4.Medium

You buy a bond with 10 years to maturity (face value €1 000, annual coupon 4%) when its yield to maturity is 3.5%. 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 = 4%n = 10y₀ = 3.5%y₁ = 4%

HPR = %

5.Hard

A bond with a face value of €1 000 pays an annual coupon of 4.5% and matures in 5 years. The yield to maturity is 6%. Find the Macaulay duration D in years.

F = €1 000coupon = 4.5%n = 5YTM = 6%

D = years

6.Hard

A bond with a face value of €1 000 and an annual coupon of 8% matures in 4 years and sells for €1 070. Find its yield to maturity YTM in percent.

F = €1 000coupon = 8%n = 4P = €1 070

YTM = %

Answer key

1. P = 1082 €
2. P = 838.2 €
3. P = 972.5 €
4. HPR = −0.152 %
5. D = 4.572 years
6. YTM = 5.981 %

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