QUESTION $5$

A risk$-$free bond with three years to maturity has a face value of $$1,000$ and pays annual coupons of $$50.$

The next coupon will be paid a year from now and the last coupon is paid together with the face value. The

bond's yield to maturity is $4\%.$ What is the bond price?

A$.$ $$1025\mathrm{.}000$

B$.$ $$1020\mathrm{.}000$

C$.$ $$1025\mathrm{.}251$

D$.$ $$1027\mathrm{.}751$