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 5 years. The yield to maturity is 5%. Find the price P of the bond.

F = €1 000coupon = 3%YTM = 5%n = 5

P = €

2.Easy

A bond with a face value of €1 000 pays an annual coupon of 4% and matures in 10 years. The yield to maturity is 3.5%. Find the price P of the bond.

F = €1 000coupon = 4%YTM = 3.5%n = 10

P = €

3.Medium

A bond with a face value of €1 000 pays a 4.5% annual coupon in two half-yearly payments and matures in 9 years. The yield to maturity is 5.5% per year. Find the price P of the bond.

F = €1 000coupon = 4.5%YTM = 5.5%n = 9

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 9.5%. Find your holding period return HPR in percent.

F = €1 000coupon = 2%n = 4y₀ = 9%y₁ = 9.5%

HPR = %

5.Hard

A bond trades at €1 055 with a yield to maturity of 4% (annual compounding) and a Macaulay duration of 11.9 years. Use the modified duration to estimate the new price P if the yield falls by 100 basis points.

P₀ = €1 055y = 4%D = 11.9Δy = −100 bp

P = €

6.Hard

A bond with a face value of €1 000 and an annual coupon of 5% matures in 4 years and sells for €950. Find its yield to maturity YTM in percent.

F = €1 000coupon = 5%n = 4P = €950

YTM = %

Answer key

1. P = 913.4 €
2. P = 1042 €
3. P = 929.8 €
4. HPR = 7.58 %
5. P = 1176 €
6. YTM = 6.458 %

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