Final answer:
The present value of the security that will pay $1000 in one year at a discount rate of 3% is $970.87. This is calculated using the present value formula with the given parameters.
Step-by-step explanation:
The present value of a security that will pay $1000 in one year's time, when using a discount rate of 3%, can be calculated by discounting the future value using the present value formula, which is PV = FV / (1 + r)n. Here, FV is the future value of the security, r is the discount rate, and n is the number of periods until maturity. For this scenario, we have FV = $1000, r = 0.03, and n = 1 year.
The calculation would be: PV = $1000 / (1 + 0.03)1 = $1000 / 1.03 = $970.87. Therefore, the value of the security today is $970.87, option c).