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

F = €1 000coupon = 8%YTM = 7%n = 8

P = €

2.Easy

A zero-coupon bond pays €1 000 in 3 years and nothing before. The yield to maturity is 2.5% per year. Find the price P of the bond.

F = €1 000n = 3YTM = 2.5%

P = €

3.Medium

You buy a bond with 5 years to maturity (face value €1 000, annual coupon 7%) when its yield to maturity is 2.5%. 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 = 5y₀ = 2.5%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 €1 025 when the yield to maturity is 5.5%. Find the coupon rate c in percent.

F = €1 000n = 6P = €1 025YTM = 5.5%

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 €940. Find its yield to maturity YTM in percent.

F = €1 000coupon = 4%n = 7P = €940

YTM = %

6.Hard

A bond with a face value of €1 000 and an annual coupon of 3% matures in 8 years and sells for €935. Find its yield to maturity YTM in percent.

F = €1 000coupon = 3%n = 8P = €935

YTM = %

Answer key

1. P = 1060 €
2. P = 928.6 €
3. HPR = 0.7958 %
4. c = 6 %
5. YTM = 5.038 %
6. YTM = 3.964 %

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