Forward Pricing of Fixed Income Securities

In a forward contract involving fixed income securities, the pricing of the forward contract is influenced by several factors including the spot price of the underlying asset, the risk-free interest rate, and any cash flows associated with the asset prior to the delivery date.

Consider a 5-year government bond with a face value of $1,000, currently trading in the spot market at $950. The bond pays an annual coupon of 5% at the end of each year. You want to determine the forward price for a 1-year forward contract on this bond that starts in one year.

Which of the following is the correct forward price for this bond?