Assume investors demand a real rate of return equal to 3 percent and that there is no maturity risk premium associated with Treasury securities. According to the Wall Street Journal, the average nominal yields on risk-free Treasury securities with different maturities are:

Type of security	Yield
1-year	4.5%
2-year	4.6
3-year	4.8
4-year	5.0

What is the one-year nominal interest rate and the inflation premium that is expected in Year 4?

	a.	5.0%; 2.0%
	b.	4.5%; 1.5%
	c.	3.0%; 1.8%
	d.	5.6%; 2.6%
	e.	There is not enough information to answer this question.