Question: The zero rates with continuous compounding are as follows: 6 months at 3.0%; 12 months at 3.2%; and 18 months at 3.5%. If the bond

The zero rates with continuous compounding are as follows: 6 months at 3.0%; 12 months at 3.2%; and 18 months at 3.5%. If the bond pays interest semiannually, what is the price of a $100 par value, 18-month 12% coupon bond based on these zero rates?

A.$118

B.$108

C.$124

D.$112

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