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.

New worksheet Practise online with hints

For teachers: free to print, copy and use in class. Every new worksheet has new values and its own answer key. A link to ExamProblems on your course page is appreciated.

Name: ____________________ Date: ____________

1.Easy

A zero-coupon bond pays €1 000 in 17 years and nothing before. The yield to maturity is 3% per year. Find the price P of the bond.

F = €1 000n = 17YTM = 3%

P = €

2.Easy

A zero-coupon bond with a face value of €1 000 matures in 6 years and costs €888 today. Find its yield to maturity YTM in percent.

F = €1 000n = 6P = €888

YTM = %

3.Medium

A bond with a face value of €1 000 pays a 2% annual coupon in two half-yearly payments and matures in 7 years. The yield to maturity is 2.5% per year. Find the price P of the bond.

F = €1 000coupon = 2%YTM = 2.5%n = 7

P = €

4.Medium

You buy a bond with 4 years to maturity (face value €1 000, annual coupon 2%) 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 = 2%n = 4y₀ = 9%y₁ = 10%

HPR = %

5.Hard

A bond trades at €910 with a yield to maturity of 5% (annual compounding) and a Macaulay duration of 6.6 years. Use the modified duration to estimate the new price P if the yield falls by 50 basis points.

P₀ = €910y = 5%D = 6.6Δy = −50 bp

P = €

6.Hard

A bond with a face value of €1 000 and an annual coupon of 5% matures in 10 years and sells for €1 125. Find its yield to maturity YTM in percent.

F = €1 000coupon = 5%n = 10P = €1 125

YTM = %

Answer key

1. P = 605 €
2. YTM = 1.999 %
3. P = 968.1 €
4. HPR = 6.186 %
5. P = 938.6 €
6. YTM = 3.497 %

Full step-by-step solutions: practise this topic on examproblems.com.