A bond that pays interest annually yields a rate of return of $7\mathrm{.}75$ percent. The inflation rate for the same period is $4$ percent. What is the real rate of return on this bond?

$3\mathrm{.}75\%$

$1\mathrm{.}94\%$

$1\mathrm{.}04\%$

$4\mathrm{.}00\%$

$11\mathrm{.}75\%$