$\begin{array}{cc}\text { Year } & \text { 1-Year Forward Rate } \\1 & 4.6\% \\2 &4.9\% \\3 & 5.2\% \\4 & 5.5\% \\5 &6.8\%\end{array}$

Multiple Choice

$\begin{array}{cc}\text { Year } & \text { 1-Year Forward Rate } \\1 & 4.6\% \\2 &4.9\% \\3 & 5.2\% \\4 & 5.5\% \\5 &6.8\%\end{array}$
What should the purchase price of a 3-year zero-coupon bond be if it is purchased today and has face value of $1,000?

A) $887.42
B) $871.12
C) $879.54
D) $856.02
E) $866.32