A Newly Issued Bond Has a Coupon Rate of 7

A newly issued bond has a coupon rate of 7 percent and semiannual interest payments. The bonds are currently priced at par. The effective annual rate provided by these bonds must be:

A) 3.5 percent.
B) greater than 3.5 percent but less than 7 percent.
C) 7 percent.
D) greater than 7 percent.
E) less than 3.5 percent.