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 4.5% and matures in 7 years. The yield to maturity is 3%. Find the price P of the bond.

F = €1 000coupon = 4.5%YTM = 3%n = 7

P = €

2.Easy

A bond with a face value of €1 000 pays an annual coupon of 6% and matures in 10 years. The yield to maturity is 4%. Find the price P of the bond.

F = €1 000coupon = 6%YTM = 4%n = 10

P = €

3.Medium

You buy a bond with 12 years to maturity (face value €1 000, annual coupon 3%) when its yield to maturity is 5%. One year later, just after receiving the first coupon, you sell it when the yield to maturity is 5.5%. Find your holding period return HPR in percent.

F = €1 000coupon = 3%n = 12y₀ = 5%y₁ = 5.5%

HPR = %

4.Medium

A bond with a face value of €1 000 matures in 13 years and pays annual coupons. It sells for €1 165 when the yield to maturity is 2.5%. Find the coupon rate c in percent.

F = €1 000n = 13P = €1 165YTM = 2.5%

c = %

5.Hard

A bond with a face value of €1 000 and an annual coupon of 4% matures in 7 years and sells for €1 060. Find its yield to maturity YTM in percent.

F = €1 000coupon = 4%n = 7P = €1 060

YTM = %

6.Hard

A bond with a face value of €1 000 and an annual coupon of 7% matures in 4 years and sells for €950. Find its yield to maturity YTM in percent.

F = €1 000coupon = 7%n = 4P = €950

YTM = %

Answer key

1. P = 1093 €
2. P = 1162 €
3. HPR = 0.6018 %
4. c = 4.002 %
5. YTM = 3.036 %
6. YTM = 8.527 %

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