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 7% and matures in 5 years. The yield to maturity is 6%. Find the price P of the bond.

F = €1 000coupon = 7%YTM = 6%n = 5

P = €

2.Easy

A zero-coupon bond pays €1 000 in 2 years and nothing before. The yield to maturity is 4% per year. Find the price P of the bond.

F = €1 000n = 2YTM = 4%

P = €

3.Medium

A bond with a face value of €1 000 pays a 7% annual coupon in two half-yearly payments and matures in 6 years. The yield to maturity is 4% per year. Find the price P of the bond.

F = €1 000coupon = 7%YTM = 4%n = 6

P = €

4.Medium

You buy a bond with 10 years to maturity (face value €1 000, annual coupon 6%) 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 10.5%. Find your holding period return HPR in percent.

F = €1 000coupon = 6%n = 10y₀ = 9%y₁ = 10.5%

HPR = %

5.Hard

A bond trades at €1 015 with a yield to maturity of 7% (annual compounding) and a Macaulay duration of 8.9 years. Use the modified duration to estimate the new price P if the yield rises by 150 basis points.

P₀ = €1 015y = 7%D = 8.9Δy = +150 bp

P = €

6.Hard

A bond with a face value of €1 000 and an annual coupon of 7% matures in 5 years and sells for €960. Find its yield to maturity YTM in percent.

F = €1 000coupon = 7%n = 5P = €960

YTM = %

Answer key

1. P = 1042 €
2. P = 924.6 €
3. P = 1159 €
4. HPR = −0.1926 %
5. P = 888.4 €
6. YTM = 8.002 %

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