Bond Valuation Practice Problems

1. The 1,000 face value ABC bond has a coupon rate of 6%, with interest paid semi-annually, and
matures in 5 years. If the bond is priced to yield 8%, what is the bond's value today?
o PV = 918.89

2. The 1,000 face value EFG bond has a coupon of 10% (paid semi-annually), matures in 4 years,
and has current price of 1,140. What is the EFG bond's yield to maturity?
o yield-to-maturity = 3% x 2 = 6%

3. The HIJ bond has a current price of 800, a maturity value of 1,000, and matures in 5 years. If
interest is paid semi-annually and the bond is priced to yield 8%, what is the bond's annual
coupon rate?
o Coupon = 30.68 per year or 3.068%

4. The KLM bond has a 8% coupon rate (with interest paid semi-annually), a maturity value of
1,000, and matures in 5 years. If the bond is priced to yield 6%, what is the bond's current
price?
o PV = 1,085.3

5. The NOP bond has an 8% coupon rate (semi-annual interest), a maturity value of 1,000, matures
in 5 years, and a current price of 1,200. What is the NOP's yield-to-maturity?
o yield-to-maturity = 1.8% x 2 = 3.6%