22. Suppose the real risk-free rate is 4.0 % , the average expected future inflation rate is 3.20 % , and a maturity risk premium of 0.10 % per year to maturity applies, i.e., MRP 0.10 % (t ) , where t is the number of years to maturity, hence the pure expectations theory is NOT valid. What rate of return would you expect on a 5-year Treasury security? Disregard cross-product terms, i.e., if averaging is required, use the arithmetic average a) 7.4 % b) 7.0% c) 7.2 % d) 7.6 % e) 7.7 % Page 22 of 25 Next Page Previous Page