Answer: 122.41

The correct answer is **B (122.41)**. The bond's price is calculated using the present value of its future cash flows, which include semiannual coupon payments and the par value at maturity. The yield to maturity (YTM) of 4% is adjusted to a semiannual rate of 2%. The present value formula for semiannual payments is applied as follows: \[ PV = \frac{6}{(1+0.02)^1} + \frac{6}{(1+0.02)^2} + \frac{6}{(1+0.02)^3} + \frac{6}{(1+0.02)^4} + \frac{6}{(1+0.02)^5} + \frac{106}{(1+0.02)^6} \] This results in a price of approximately **122.41**. Option A is incorrect because it uses an annual discount rate and coupon payment, while Option C is incorrect due to an assumption of payments at the beginning of the period.

Author: LeetQuiz Editorial Team