Bond Pricing: Level 2-3 Challenges Practice Problems Online

An investor bought a bond with a constant coupon rate for $1000 with a current yield of 10%. If the yield rises to 11%, what happens to the price?

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Stays the same Decreases to $900 Increases to $1100 Increases to $1111 Decreases to $909 Depends on term structure

Which of the following bonds, issued by the same corporation, would have the highest price volatility?

If you believe that interest rates will rise soon, which of the following bond trades should you make (to maximize your percentage return)?

What is the (dollar) price change for a 1% increase in yield (in $) of a $100 bond that pays 10% coupon rate for 5 years, with a constant yield curve of 6%?

You own a bond that will pay 7% per year for the next 10 years, on a principal of $20,000. If the prevailing discount rate is 10% throughout, what is the bond worth now?

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Excel in math and science

Master concepts by solving fun, challenging problems.

It's hard to learn from lectures and videos

Learn more effectively through short, interactive explorations.

Used and loved by over 7 million people

Learn from a vibrant community of students and enthusiasts, including olympiad champions, researchers, and professionals.

Bond Pricing

Challenge Quizzes

Bond Pricing: Level 2-3 Challenges

Image credit: Wikipedia Daderot

Learn from a vibrant community of students and enthusiasts,
including olympiad champions, researchers, and professionals.

Learn from a vibrant community of students and enthusiasts,
including olympiad champions, researchers, and professionals.