Calculate the Price at the Beginning of Year 1 of an 8

Multiple Choice

Calculate the price at the beginning of year 1 of an 8% annual coupon bond with face value $1,000 and 5 years to maturity. $\begin{array}{lr}&\text { 1-Year } \\&\text { Forward }\\\text { Year } & \text { Rate } \\1 & 5 \% \\2 & 5.5 \% \\3 & 6.0 \% \\4 & 6.5 \% \\5 & 7.0 \%\end{array}$

A) $1,105.47
B) $1,131.91
C) $1,084.25
D) $1,150.01
E) $719.75