Assume thezero-coupon yields ondefault-free securities are as summarized in the followingtable:

Maturity

1 year

2 years

3 years

4 years

5 years

Zero-Coupon Yields

4.6

4.6%

5.1

5.1%

5.3

5.3%

5.6

5.6%

5.9

5.9%

What is the price today of atwo-year, default-free security with a face value of $ 1 comma 000

$1,000 and an annual coupon rate of 4 %

4%? Does this bond trade at adiscount, atpar, or at apremium?

Note: Assume annual compounding.

What is the price today of atwo-year, default-free security with a face value of $ 1 comma 000

$1,000 and an annual coupon rate of 4 %

4%?

The price is $

nothing

. (Round to the nearestcent.)