-What Should the Purchase Price of a 2-Year Zero Coupon

$$\begin{array} { l | l } \hline \text { Year } & \text { 1-Year Forward Rate } \\\hline 1 & 4.6 \% \\\hline 2 & 4.9 \% \\\hline 3 & 5.2 \% \\\hline 4 & 5.5 \% \\\hline 5 & 5.8 \% \\\hline\end{array}$$
-What should the purchase price of a 2-year zero coupon bond be if it is purchased today and has face value of $1,000?

A) $966.87
B) $911.37
C) $950.21
D) $956.02
E) $945.51

Correct Answer:

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