Assume the zero-coupon yields on default-free securities are as summarized in the following table:

Maturity	1 year	2 years	3 years	4 years	5 years
Zero-Coupon Yields	5.0%	5.4%	5.6%	5.9%	6.1%

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%?

Note: Assume annual compounding.

Does this bond trade at a discount, at par, or at a premium? (Select the best choice below.)

1. This bond trades at par.

2.This bond trades at a discount.

3.This bond trades at a premium.

4.Not enough information.