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 6% and trades at €990. Find its current yield CY in percent.

F = €1 000coupon = 6%P = €990

CY = %

2.Easy

A bond with a face value of €1 000 pays an annual coupon of 3% and matures in 10 years. The yield to maturity is 9%. Find the price P of the bond.

F = €1 000coupon = 3%YTM = 9%n = 10

P = €

3.Medium

A bond with a face value of €1 000 pays an annual coupon of 4% and matures in 8 years. Its yield to maturity changes from 5.5% to 6%. By how much ΔP does the bond price change?

F = €1 000coupon = 4%n = 8y₁ = 5.5%y₂ = 6%

ΔP = €

4.Medium

A bond with a face value of €1 000 matures in 4 years and pays annual coupons. It sells for €1 018 when the yield to maturity is 5.5%. Find the coupon rate c in percent.

F = €1 000n = 4P = €1 018YTM = 5.5%

c = %

5.Hard

A bond with a face value of €1 000 and an annual coupon of 7% matures in 4 years and sells for €920. Find its yield to maturity YTM in percent.

F = €1 000coupon = 7%n = 4P = €920

YTM = %

6.Hard

A bond trades at €1 070 with a yield to maturity of 7% (annual compounding) and a Macaulay duration of 5.2 years. Use the modified duration to estimate the new price P if the yield rises by 100 basis points.

P₀ = €1 070y = 7%D = 5.2Δy = +100 bp

P = €

Answer key

1. CY = 6.061 %
2. P = 614.9 €
3. ΔP = −29.18 €
4. c = 6.014 %
5. YTM = 9.496 %
6. P = 1018 €

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