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5-year T-bonds yield 5.15%. The inflation premium for 5-year bonds is IP = 1.75%, the liquidity premium for BBB rated bonds is LP = 0.75%

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5-year T-bonds yield 5.15%. The inflation premium for 5-year bonds is IP = 1.75%, the liquidity premium for BBB rated bonds is LP = 0.75% versus zero for T- bonds, and the maturity risk premium for all bonds is found with the formula MRP = (t - 1)x0.1%, where t = number of years to maturity. What is the real risk-free rate? Select one: a. 1.00% O b. 1.97% O c. 3.00% O d. 1.04% e.-1.15%

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