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 8% and matures in 7 years. The yield to maturity is 5.5%. Find the price P of the bond.

F = €1 000coupon = 8%YTM = 5.5%n = 7

P = €

2.Easy

A zero-coupon bond with a face value of €1 000 matures in 5 years and costs €893 today. Find its yield to maturity YTM in percent.

F = €1 000n = 5P = €893

YTM = %

3.Medium

A bond with a face value of €1 000 matures in 8 years and pays annual coupons. It sells for €1 070 when the yield to maturity is 3%. Find the coupon rate c in percent.

F = €1 000n = 8P = €1 070YTM = 3%

c = %

4.Medium

A bond with a face value of €1 000 pays an 8% annual coupon in two half-yearly payments and matures in 5 years. The yield to maturity is 3.5% per year. Find the price P of the bond.

F = €1 000coupon = 8%YTM = 3.5%n = 5

P = €

5.Hard

A bond with a face value of €1 000 and an annual coupon of 5% matures in 10 years and sells for €860. Find its yield to maturity YTM in percent.

F = €1 000coupon = 5%n = 10P = €860

YTM = %

6.Hard

A bond trades at €1 010 with a yield to maturity of 3% (annual compounding) and a Macaulay duration of 10.1 years. Use the modified duration to estimate the new price P if the yield falls by 25 basis points.

P₀ = €1 010y = 3%D = 10.1Δy = −25 bp

P = €

Answer key

1. P = 1142 €
2. YTM = 2.289 %
3. c = 3.997 %
4. P = 1205 €
5. YTM = 6.993 %
6. P = 1035 €

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