$\begin{array}{cc}\text { Year } & \text { 1-Year Forward Rate } \\1 & 4.6\% \\2 &4.9\% \\3 & 5.2\% \\4 & 5.5\% \\5 &6.8\%\end{array}$

question 39

Multiple Choice

$\begin{array}{cc}\text { Year } & \text { 1-Year Forward Rate } \\1 & 4.6\% \\2 &4.9\% \\3 & 5.2\% \\4 & 5.5\% \\5 &6.8\%\end{array}$
What should the purchase price of a 4-year zero-coupon bond be if it is purchased today and has face value of $1,000?

• A) $887.42
• B) $821.15
• C) $879.54
• D) $856.02
• E) $866.32

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