Corporate Finance (FIN 201) Bond Pricing, YTM, Duration and Convexity Practice Problems
New York University
Corporate Finance (FIN 201) | Practice Problems

Overview
A finance practice set on pricing bonds, solving for yield, and measuring interest-rate risk with duration and convexity.

Key topics
•present value of bond cash flows
•yield to maturity (YTM)
•price-yield relationship
•Macaulay and modified duration
•convexity and rate-risk intuition

Suggested study tasks
•price a coupon bond from inputs
•solve or approximate YTM from price
•compute modified duration from cash flows
•compare rate sensitivity across two bonds
•explain why convexity matters when yields change

Common pitfalls
•using the wrong compounding frequency
•mixing discount rate units with coupon periods
•confusing duration with maturity
•sign mistakes when interpreting yield changes