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 trades at €1 055. Find its current yield CY in percent.

F = €1 000coupon = 3%P = €1 055

CY = %

2.Easy

A zero-coupon bond pays €1 000 in 13 years and nothing before. The yield to maturity is 2% per year. Find the price P of the bond.

F = €1 000n = 13YTM = 2%

P = €

3.Medium

A bond with a face value of €1 000 pays an annual coupon of 5% and matures in 4 years. Its yield to maturity changes from 3% to 1%. By how much ΔP does the bond price change?

F = €1 000coupon = 5%n = 4y₁ = 3%y₂ = 1%

ΔP = €

4.Medium

A bond with a face value of €1 000 pays a 7% annual coupon in two half-yearly payments and matures in 3 years. The yield to maturity is 8% per year. Find the price P of the bond.

F = €1 000coupon = 7%YTM = 8%n = 3

P = €

5.Hard

A bond trades at €915 with a yield to maturity of 7% (annual compounding) and a Macaulay duration of 3.5 years. Use the modified duration to estimate the new price P if the yield falls by 50 basis points.

P₀ = €915y = 7%D = 3.5Δy = −50 bp

P = €

6.Hard

A bond with a face value of €1 000 and an annual coupon of 3% matures in 3 years and sells for €960. Find its yield to maturity YTM in percent.

F = €1 000coupon = 3%n = 3P = €960

YTM = %

Answer key

1. CY = 2.844 %
2. P = 773 €
3. ΔP = 81.74 €
4. P = 973.8 €
5. P = 930 €
6. YTM = 4.454 %

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