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 bond with a face value of €1 000 pays an annual coupon of 4.5% and trades at €950. Find its current yield CY in percent.

F = €1 000coupon = 4.5%P = €950

CY = %

2.Easy

A bond with a face value of €1 000 pays an annual coupon of 3% and trades at €955. Find its current yield CY in percent.

F = €1 000coupon = 3%P = €955

CY = %

3.Medium

A bond with a face value of €1 000 pays a 7% annual coupon in two half-yearly payments and matures in 11 years. The yield to maturity is 3.5% per year. Find the price P of the bond.

F = €1 000coupon = 7%YTM = 3.5%n = 11

P = €

4.Medium

You buy a bond with 10 years to maturity (face value €1 000, annual coupon 4.5%) 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 1.5%. Find your holding period return HPR in percent.

F = €1 000coupon = 4.5%n = 10y₀ = 2.5%y₁ = 1.5%

HPR = %

5.Hard

A bond with a face value of €1 000 pays an annual coupon of 3% and matures in 6 years. The yield to maturity is 4%. Find the Macaulay duration D in years.

F = €1 000coupon = 3%n = 6YTM = 4%

D = years

6.Hard

A bond with a face value of €1 000 and an annual coupon of 8% matures in 4 years and sells for €935. Find its yield to maturity YTM in percent.

F = €1 000coupon = 8%n = 4P = €935

YTM = %

Answer key

1. CY = 4.737 %
2. CY = 3.141 %
3. P = 1317 €
4. HPR = 10.28 %
5. D = 5.566 years
6. YTM = 10.05 %

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