The effective rate, which is equivalent to a nominal rate of 12% compounded semi-annually, is

12.36%

The correct answer is Option (3) → 12.36% **

Nominal rate = $12\%$ compounded semi-annually.

Semi-annual rate:

$\frac{12\%}{2} = 6\% = 0.06$

Effective annual rate (EAR):

$\left(1 + 0.06\right)^{2} - 1$

$= 1.06^{2} - 1$

$= 1.1236 - 1$

$= 0.1236$

Effective rate = $12.36\%$