-What Should the Purchase Price of a 4-Year Zero Coupon

question 18

Multiple Choice

$$\begin{array} { l | l } \hline \text { Year } & \text { 1-Year Forward Rate } \\\hline 1 & 4.6 \% \\\hline 2 & 4.9 \% \\\hline 3 & 5.2 \% \\\hline 4 & 5.5 \% \\\hline 5 & 5.8 \% \\\hline\end{array}$$
-What should the purchase price of a 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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