$\begin{array}{cc}\text { Year } & \text { 1-Year Forward Rate } \\1 & 5\% \\2 & 5.5\% \\3 & 6.0\% \\4 & 6.5\% \\5 & 7.0\%\end{array}$

question 64

Multiple Choice

$\begin{array}{cc}\text { Year } & \text { 1-Year Forward Rate } \\1 & 5\% \\2 & 5.5\% \\3 & 6.0\% \\4 & 6.5\% \\5 & 7.0\%\end{array}$
Calculate the price at the beginning of year 1 of an 8% annual coupon bond with face value $1,000 and 5 years to maturity.

• A) $1,105.47
• B) $1,131.91
• C) $1,084.35
• D) $1,150.01
• E) $719.75

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Definitions:

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