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The price of a 1-year, zero-coupon, risk-free security with face value $1,000 is $961.54. The price of a 2-year, zero-coupon, risk-free security with face value
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The price of a 1-year, zero-coupon, risk-free security with face value $1,000 is $961.54. The price of a 2-year, zero-coupon, risk-free security with face value $1,000 is $890.00. What is the price of a 2-year risk-free bond with face value of $1,000, coupon rate of 5% and annual coupons?
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$890.00
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$938.08
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$981.67
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$982.58
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None of the above
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