Assume that a 3-year Treasury note has no maturity premium and that the real, risk-free rate of interest is 3 percent. If the T-note carries a yield to maturity of 13 percent, and if the expected average inflation rate over the next 2 years is 11 percent, what is the implied expected inflation rate during Year 3? Please show work.

A 7%

B 18%

C 9%

D 17%

E 8%