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 5% and matures in 5 years. The yield to maturity is 3%. Find the price P of the bond.

F = €1 000coupon = 5%YTM = 3%n = 5

P = €

2.Easy

A zero-coupon bond with a face value of €1 000 matures in 4 years and costs €786 today. Find its yield to maturity YTM in percent.

F = €1 000n = 4P = €786

YTM = %

3.Medium

A bond with a face value of €1 000 pays a 4.5% annual coupon in two half-yearly payments and matures in 4 years. The yield to maturity is 3.5% per year. Find the price P of the bond.

F = €1 000coupon = 4.5%YTM = 3.5%n = 4

P = €

4.Medium

You buy a bond with 4 years to maturity (face value €1 000, annual coupon 5%) when its yield to maturity is 3%. One year later, just after receiving the first coupon, you sell it when the yield to maturity is 4.5%. Find your holding period return HPR in percent.

F = €1 000coupon = 5%n = 4y₀ = 3%y₁ = 4.5%

HPR = %

5.Hard

A bond with a face value of €1 000 and an annual coupon of 5% matures in 10 years and sells for €830. Find its yield to maturity YTM in percent.

F = €1 000coupon = 5%n = 10P = €830

YTM = %

6.Hard

A bond with a face value of €1 000 pays an annual coupon of 2% and matures in 5 years. The yield to maturity is 3.5%. Find the Macaulay duration D in years.

F = €1 000coupon = 2%n = 5YTM = 3.5%

D = years

Answer key

1. P = 1092 €
2. YTM = 6.205 %
3. P = 1037 €
4. HPR = −0.9864 %
5. YTM = 7.474 %
6. D = 4.8 years

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