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 zero-coupon bond with a face value of €1 000 matures in 14 years and costs €779 today. Find its yield to maturity YTM in percent.

F = €1 000n = 14P = €779

YTM = %

2.Easy

A bond with a face value of €1 000 pays an annual coupon of 3% and matures in 6 years. The yield to maturity is 4%. Find the price P of the bond.

F = €1 000coupon = 3%YTM = 4%n = 6

P = €

3.Medium

You buy a bond with 4 years to maturity (face value €1 000, annual coupon 7%) when its yield to maturity is 3.5%. One year later, just after receiving the first coupon, you sell it when the yield to maturity is 3%. Find your holding period return HPR in percent.

F = €1 000coupon = 7%n = 4y₀ = 3.5%y₁ = 3%

HPR = %

4.Medium

A bond with a face value of €1 000 matures in 6 years and pays annual coupons. It sells for €821 when the yield to maturity is 9%. Find the coupon rate c in percent.

F = €1 000n = 6P = €821YTM = 9%

c = %

5.Hard

A bond with a face value of €1 000 pays an annual coupon of 2% and matures in 4 years. The yield to maturity is 5.5%. Find the Macaulay duration D in years.

F = €1 000coupon = 2%n = 4YTM = 5.5%

D = years

6.Hard

A bond with a face value of €1 000 and an annual coupon of 7% matures in 10 years and sells for €845. Find its yield to maturity YTM in percent.

F = €1 000coupon = 7%n = 10P = €845

YTM = %

Answer key

1. YTM = 1.8 %
2. P = 947.6 €
3. HPR = 4.837 %
4. c = 5.01 %
5. D = 3.875 years
6. YTM = 9.465 %

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