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Assume the zero-coupon yields on default-free securities are as summarized in the following table: Maturity (years) 1 2 3 4 5, Zero-coupon YTM 6.00% 6.30%

Assume the zero-coupon yields on default-free securities are as summarized in the following table: Maturity (years) 1 2 3 4 5, Zero-coupon YTM 6.00% 6.30% 6.70% 6.90% 7.30% What is the price today of a two-year, default-free security with a face value of $1,000 and an annual coupon rate of 5%? Does this bond trade at a discount, at par, or at a premium? Note: Assume annual compounding.

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