Introduction:
The continent that is bounded by water bodies on three sides is Europe. Europe is located in the Northern Hemisphere and is bordered by the Atlantic Ocean in the west, the Arctic Ocean in the north, and the Mediterranean Sea in the south. In this response, we will discuss why Europe is the correct answer to the given question.

Body:

Geographical Location:
- Europe is one of the seven continents of the world and is situated entirely in the Northern Hemisphere.
- It is located to the west of Asia, east of the Atlantic Ocean, north of the Mediterranean Sea, and south of the Arctic Ocean.

Boundaries:
- Europe is bounded by water bodies on three sides, which are the Atlantic Ocean, the Arctic Ocean, and the Mediterranean Sea.
- The Atlantic Ocean lies to the west of Europe and separates it from North and South America.
- The Arctic Ocean borders the northern part of Europe, separating it from the polar regions.
- The Mediterranean Sea is located to the south of Europe, separating it from Africa.

Water Bodies:
- The Atlantic Ocean, which is the second-largest ocean in the world, is to the west of Europe.
- The Arctic Ocean, the smallest and shallowest ocean, borders the northern part of Europe.
- The Mediterranean Sea, a large sea connected to the Atlantic Ocean, lies to the south of Europe.

Significance of Water Bodies:
- The presence of these water bodies has played a crucial role in shaping the history, culture, and economy of Europe.
- The Atlantic Ocean has been a major route for exploration, trade, and colonization, connecting Europe with the Americas.
- The Arctic Ocean has strategic importance due to its natural resources and potential shipping routes.
- The Mediterranean Sea has been a center of trade, cultural exchange, and tourism, connecting Europe with Africa and Asia.

Conclusion:
Europe is the correct answer to the question as it is bounded by water bodies on three sides. The Atlantic Ocean, the Arctic Ocean, and the Mediterranean Sea form its western, northern, and southern boundaries respectively. These water bodies have played a significant role in shaping the geography and history of Europe.