The yield to maturity on two-year zero coupon Treasury bonds is 2.5% and the yield to maturity on one-year zero coupon Treasury bonds is 2%? The face value of all bonds is $1,000. What is the price and the yield to maturity of the two-year Treasury coupon bond that pays 5% in annual coupons?

$1,000 and 5%

$1,038.75 and 2.98%

$1,035 and 3.05%

$1.040.58 and 2.25%