Consider the following zero-coupon yields on default free securities:

(a) The price today of a 3 year default free security with a face value of $1,000 and an annual coupon rate of 6% is closest to:

i. $1,000.

ii. $1,021.

iii. $1,013.

iv. $1,005.

(b) A 3-year default free security with a face value of $1000 and an annual coupon rate of 6% will trade

1. at a discount.

2. at a premium.

3. at par.

4. there is insufficient information provided to answer this ques- tion.