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10-year Treasury bonds yield 3.8%. The inflation premium (IP) is 1.2%, and the maturity risk premium (MRP) on 10-year T-bonds is 0.3%. There is no

10-year Treasury bonds yield 3.8%. The inflation premium (IP) is 1.2%, and the maturity risk premium (MRP) on 10-year T-bonds is 0.3%. There is no liquidity premium on these bonds. What is the real risk-free rate, r*?

3.52%

2.30%

2.00%

3.20%

3.87%

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