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 3% and matures in 7 years. The yield to maturity is 2.5%. Find the price P of the bond.

F = €1 000coupon = 3%YTM = 2.5%n = 7

P = €

2.Easy

A bond with a face value of €1 000 pays an annual coupon of 2% and trades at €1 090. Find its current yield CY in percent.

F = €1 000coupon = 2%P = €1 090

CY = %

3.Medium

A bond with a face value of €1 000 matures in 4 years and pays annual coupons. It sells for €1 037 when the yield to maturity is 3.5%. Find the coupon rate c in percent.

F = €1 000n = 4P = €1 037YTM = 3.5%

c = %

4.Medium

A bond with a face value of €1 000 matures in 3 years and pays annual coupons. It sells for €973 when the yield to maturity is 5%. Find the coupon rate c in percent.

F = €1 000n = 3P = €973YTM = 5%

c = %

5.Hard

A bond trades at €1 065 with a yield to maturity of 3% (annual compounding) and a Macaulay duration of 12 years. Use the modified duration to estimate the new price P if the yield falls by 150 basis points.

P₀ = €1 065y = 3%D = 12Δy = −150 bp

P = €

6.Hard

A bond with 18 years to maturity (face value €1 000, annual coupon 8%) sells for €1 281. The issuer can call it in 6 years at a call price of €1 080. Find the yield to call YTC in percent.

F = €1 000coupon = 8%P = €1 281call price = €1 080call in 6 years

YTC = %

Answer key

1. P = 1032 €
2. CY = 1.835 %
3. c = 4.507 %
4. c = 4.009 %
5. P = 1251 €
6. YTC = 3.872 %

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