Corporate Finance (FIN 201) Bond Pricing Practice Problems (YTM, Price-Yield, Duration Basics)
New York University
Corporate Finance (FIN 201) | Practice Problems

Overview
A FIN 201 bond pricing problem set for finals: compute prices and yields, use the price-yield relationship, and build quick intuition for duration and interest-rate sensitivity.

Key topics
•bond price as PV of coupons and principal
•yield to maturity (YTM) interpretation and solving approach
•price-yield inverse relationship and convexity intuition
•duration as interest-rate sensitivity (conceptual)
•common exam traps (clean vs dirty price, compounding frequency)

Suggested study tasks
•price 10 coupon bonds at different yields
•solve 6 YTM questions with trial-and-check reasoning
•do 8 price change intuition questions (rates up/down)
•compute simple duration-style comparisons in 6 prompts
•write a 10-step bond pricing checklist

Common pitfalls
•mixing nominal coupon rate with yield
•forgetting compounding frequency and periods
•sign errors when rates change
•confusing duration with maturity
•not discounting each cash flow at the right period