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You are given the following forward rates. Each rate applies for a period of one year: Year Forward Rate 1 4% 2 5% 3 7%

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You are given the following forward rates. Each rate applies for a period of one year: Year Forward Rate 1 4% 2 5% 3 7% 4 3% Calculate the present value of a 3-year bond paying annual coupons of 8% and maturing for $1000. a) 1031.09 b) 1102.36 c) 1083.21 d) 1074.49 e) 1095.52

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