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7. A 5-year zero coupon bond pays 10% annual coupons, and has a face value of $1,000. Zero coupon bonds with 1-5 years to maturity,

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7. A 5-year zero coupon bond pays 10% annual coupons, and has a face value of $1,000. Zero coupon bonds with 1-5 years to maturity, each with a face value of $100, have the following prices: Price of 1 year zero = $99.14 Price of 2-year zero = $97.88 Price of 3-year zero $96.32 Price of 4-year zero = $89.44 Price of 5-year zero $87.76 What is the price of the 5-year coupon bond? (2 marks)

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