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.

New worksheet Practise online with hints

For teachers: free to print, copy and use in class. Every new worksheet has new values and its own answer key. A link to ExamProblems on your course page is appreciated.

Name: ____________________ Date: ____________

1.Easy

A zero-coupon bond with a face value of €1 000 matures in 5 years and costs €814 today. Find its yield to maturity YTM in percent.

F = €1 000n = 5P = €814

YTM = %

2.Easy

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

F = €1 000coupon = 8%YTM = 7%n = 4

P = €

3.Medium

A bond with a face value of €1 000 pays an 8% annual coupon in two half-yearly payments and matures in 7 years. The yield to maturity is 2.5% per year. Find the price P of the bond.

F = €1 000coupon = 8%YTM = 2.5%n = 7

P = €

4.Medium

A bond with a face value of €1 000 pays a 4% annual coupon in two half-yearly payments and matures in 7 years. The yield to maturity is 8% per year. Find the price P of the bond.

F = €1 000coupon = 4%YTM = 8%n = 7

P = €

5.Hard

A bond with 13 years to maturity (face value €1 000, annual coupon 5%) sells for €1 275. The issuer can call it in 4 years at a call price of €1 050. Find the yield to call YTC in percent.

F = €1 000coupon = 5%P = €1 275call price = €1 050call in 4 years

YTC = %

6.Hard

A bond trades at €965 with a yield to maturity of 6% (annual compounding) and a Macaulay duration of 10.7 years. Use the modified duration to estimate the new price P if the yield rises by 25 basis points.

P₀ = €965y = 6%D = 10.7Δy = +25 bp

P = €

Answer key

1. YTM = 4.202 %
2. P = 1034 €
3. P = 1351 €
4. P = 788.7 €
5. YTC = 50 %
6. P = 940.6 €

Full step-by-step solutions: practise this topic on examproblems.com.