Forward Price of a Bond

Consider an investor who enters into a forward contract to purchase a 10-year government bond that has a coupon rate of 4% and a face value of $1,000. The contract is set to begin in one year. The current yield to maturity (YTM) on similar 10-year bonds is 3.5%. The bond will make annual coupon payments. What is the forward price of this bond at the initiation of the contract?

To calculate the forward price, use the present value of the bond's future cash flows at the current YTM, then adjust for the time until the contract begins.