## Bond Valuation Practice Problems

Created by Pamela Peterson Drake

- 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?

- 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?

- 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?

- 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?

- 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?

Solutions