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 8% and matures in 3 years. The yield to maturity is 3.5%. Find the price P of the bond.

F = €1 000coupon = 8%YTM = 3.5%n = 3

P = €

2.Easy

A bond with a face value of €1 000 pays an annual coupon of 8% and trades at €1 105. Find its current yield CY in percent.

F = €1 000coupon = 8%P = €1 105

CY = %

3.Medium

You buy a bond with 7 years to maturity (face value €1 000, annual coupon 3%) when its yield to maturity is 9%. One year later, just after receiving the first coupon, you sell it when the yield to maturity is 10%. Find your holding period return HPR in percent.

F = €1 000coupon = 3%n = 7y₀ = 9%y₁ = 10%

HPR = %

4.Medium

A bond with a face value of €1 000 matures in 6 years and pays annual coupons. It sells for €973 when the yield to maturity is 3.5%. Find the coupon rate c in percent.

F = €1 000n = 6P = €973YTM = 3.5%

c = %

5.Hard

A bond with a face value of €1 000 pays an 8% annual coupon in two half-yearly payments and matures in 10 years. It sells for €935. Find its yield to maturity YTM as an annual rate (twice the half-yearly yield), in percent.

F = €1 000coupon = 8% (2×)n = 10P = €935

YTM = %

6.Hard

A bond with a face value of €1 000 pays an annual coupon of 2% and matures in 3 years. The yield to maturity is 3.5%. Find the Macaulay duration D in years.

F = €1 000coupon = 2%n = 3YTM = 3.5%

D = years

Answer key

1. P = 1126 €
2. CY = 7.24 %
3. HPR = 3.884 %
4. c = 2.993 %
5. YTM = 8.999 %
6. D = 2.94 years

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