Course no. 3
Example 1
For what price the console bond should be sold if a nominal value of this bond is 200 000 USD
and coupon rate is 5 % p.a. Investor requires a yield of 4 % p.a. and coupons have a frequency of
compounding once a year.
Example 2
For what price the discount bond should be sold if a nominal value of this bond is 100 000 USD
and the maturity is three years. Investor requires a yield of 5 % p.a. and coupons have a
frequency of compounding once a year.
Example 3
For what price the 4-years coupon bond should be sold if a nominal value of this bond is 100 000
USD and coupon rate is 6 % p.a. with an annual coupon payments. Investor requires a yield of 7
% p.a.
Example 4
For what price the 2-years coupon bond should be sold if a nominal value of this bond is 1000
USD and coupon rate is 5 % p.a. with semi-annual coupon payments. Investor requires a yield of
4 % p.a.
Example 5
Investor is willing to invest 12 000 000 USD in bonds. How many pieces of bonds with nominal
value of 10 000 USD, with coupon rate of 3 % p.a. with an annual coupon payments, maturity of
3 years, and yield to maturity of 3 % p.a. can he buy?
Example 6
Which bond we will choose (buy) if our only criterion is yield to maturity?
a) Consol bond with a price of 1 mil. USD and with an annual coupon of 50 000 USD
b) Discount bond with a maturity of 3 years, nominal value of 100 000 USD and price of
78 500 USD
c) Coupon bond with a maturity of 3 years, coupon rate of 12,5 % p.a. with an annual
coupon payments and with a price of 98 %.
Example 7
What would be the yield of bond if its nominal value is 2 000 USD, coupon rate is 15 % p.a.
with annual coupon payments, the maturity is 2 years and the market price is 2 300 USD.
Example 8
We bought a coupon bond with a nominal value of 10 000 USD, coupon rate of 5 % p.a. (with
annual coupon payments) for a price of 9 800 USD. After two years from a purchase we sold this
bond for 10 200 USD. What would be your yield of this investment (rendita).
Example 9
State bonds with a nominal value of 10 000 USD and with a coupon rate of 5 % p.a. has paid off
its last coupon payment 60 days ago. Yield to maturity is 5,10 % p.a. and maturity is 3 years and
300 days. What is its market price, total price and aliquot interests return? How many pieces of
bonds you can buy?
Example 10
State bonds with a nominal value of 15 000 USD and with a coupon rate of 6 % p.a. has paid off
its last coupon payment 55 days ago. Yield to maturity (YTM) is 7,50 % p.a. and maturity is 2
years and 305 days. What is its market price, total price and aliquot interests return? How many
pieces of bonds you can buy if you have 500 000 USD?
Example 11
What would be the market price of the following bond:
Nominal value
Annual coupon rate
Maturity
Required annual yield
10 000 USD
10 %
annual coupon payments
5 years
11 %
Example 12
How many years left to maturity of coupon bond, if the nominal value of bond is 15 000 USD,
your required annual yield is 10 % p.a. and price you paid is 10 000 USD.
Example 13
What the YTM of bond would be if its nominal value is 2 500 USD and regular annual coupon
of 500 USD, maturity is 3 years. Market price of this bond is 2 765 USD.
Example 14
What the rendita of bond would be if its nominal value is 10 000 USD. You held this bond for 5
years. Regular annual coupon rate is 15 % p.a. Purchase price was 15 000 USD and now you
would like to sale this bond for a price of 20 000 USD.
Example 15
Investor would like to invest 12 mil. USD to bonds. How many pieces of bonds he can buy if
these securities have a maturity 3 years, coupon rate is 12 % p.a. and nominal value 10 000
USD? YTM of these bonds is 12,5 % p.a.