0 rate = discounting rate

Q5. (7 marks) Suppose that we have a bond with time to maturity in 2 years, and the zero rates for the maturities of 0.5, 1.0, 1.5, and 2.0 years are given as 2.5%, 3.0%, 3.5%, and 4.0% respectively. If the face value of the bond is 100 with semi-annual coupon payments of 2 dollars, then calculate the price of this bond accurate to two decimals. Choose the right answer. A. 99.97 B. 102.50 C. 96.93 D. 90.98 E. None of the above