The 1-year discount factor is $d_1 = 0.9831$. Assuming semiannual compounding, the 1-year semiannual spot rate $r_1$ is found by $1 / (1 + r_1/2)^2 = 0.9831$, which gives$(1 + r_1/2)^2 = 1.01719$, so$r_1 \approx 1.71%$.

The bond price is the present value of its cash flows (semiannual coupon of $2.5 and principal of $100): $P = \frac{2.5}{(1 + 0.011/2)^1} + 2.5 \times 0.9831 + \frac{102.5}{(1 + 0.03/2)^3}$ $P = \frac{2.5}{1.0055} + 2.45775 + \frac{102.5}{1.015^3}$ $P = 2.4863 + 2.45775 + 98.0225 \approx 102.967$