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Compute the price of a risk-free bond with a face value of $ 1,000 that has...

Compute the price of a risk-free bond with a face value of $ 1,000 that has seven years left to maturity, a coupon rate of 5%, and makes annual interest payments. Assume that it just made a coupon payment (i.e. it has seven annual payments left to make). Also assume that the current term structure of risk-free rates is as follows,

Maturity in years 1 2 3 4 5 6 7

Risk-free yields 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00%

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