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 13 years and costs €707 today. Find its yield to maturity YTM in percent.

F = €1 000n = 13P = €707

YTM = %

2.Easy

A bond with a face value of €1 000 pays an annual coupon of 6% and matures in 7 years. The yield to maturity is 7%. Find the price P of the bond.

F = €1 000coupon = 6%YTM = 7%n = 7

P = €

3.Medium

You buy a bond with 4 years to maturity (face value €1 000, annual coupon 4.5%) 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 5%. Find your holding period return HPR in percent.

F = €1 000coupon = 4.5%n = 4y₀ = 3.5%y₁ = 5%

HPR = %

4.Medium

A bond with a face value of €1 000 pays a 2% annual coupon in two half-yearly payments and matures in 5 years. The yield to maturity is 5% per year. Find the price P of the bond.

F = €1 000coupon = 2%YTM = 5%n = 5

P = €

5.Hard

A bond with a face value of €1 000 and an annual coupon of 8% matures in 7 years and sells for €1 110. Find its yield to maturity YTM in percent.

F = €1 000coupon = 8%n = 7P = €1 110

YTM = %

6.Hard

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

F = €1 000coupon = 4%n = 3YTM = 3%

D = years

Answer key

1. YTM = 2.703 %
2. P = 946.1 €
3. HPR = −0.5158 %
4. P = 868.7 €
5. YTM = 6.028 %
6. D = 2.888 years

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