5. Suppose 1-year Treasury bills currently yield 7.00% and the current and future inflation rate is expected to be constant at 3.2% per year. What is the real risk- free rate of return, r*? a. 4.19% b. 3.80% c. 4.40% d. 4.62% 6. Suppose the interest rate on a 1-year T-bill is 5.0% and on a 2-year T-bill is 6.0%. Assuming the pure expectations theory is correct (and MRP = 0), what is the market's forecast for 1-year rates 1 year from now? a. 7.36% b. 7.01% c. 8.16% d. 8.54% e. 9.04%