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 zero-coupon bond pays €1 000 in 9 years and nothing before. The yield to maturity is 7% per year. Find the price P of the bond.

F = €1 000n = 9YTM = 7%

P = €

2.Easy

A bond with a face value of €1 000 pays an annual coupon of 8% and matures in 5 years. The yield to maturity is 3.5%. Find the price P of the bond.

F = €1 000coupon = 8%YTM = 3.5%n = 5

P = €

3.Medium

You buy a bond with 8 years to maturity (face value €1 000, annual coupon 8%) when its yield to maturity is 4%. One year later, just after receiving the first coupon, you sell it when the yield to maturity is 3.5%. Find your holding period return HPR in percent.

F = €1 000coupon = 8%n = 8y₀ = 4%y₁ = 3.5%

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 5 years. The yield to maturity is 5.5% per year. Find the price P of the bond.

F = €1 000coupon = 5%YTM = 5.5%n = 5

P = €

5.Hard

A bond with a face value of €1 000 pays an annual coupon of 8% and matures in 5 years. The yield to maturity is 7%. Find the Macaulay duration D in years.

F = €1 000coupon = 8%n = 5YTM = 7%

D = years

6.Hard

A bond with a face value of €1 000 and an annual coupon of 7% matures in 10 years and sells for €1 075. Find its yield to maturity YTM in percent.

F = €1 000coupon = 7%n = 10P = €1 075

YTM = %

Answer key

1. P = 543.9 €
2. P = 1203 €
3. HPR = 6.763 %
4. P = 978.4 €
5. D = 4.327 years
6. YTM = 5.982 %

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