Assume that the real risk-free rate is r* = 2.5% and the average expected inflation rate is 3% for each future year. The DRP and LP for Bond X are 1% each, and the applicable MRP is 1.5%. What is Bond X's interest rate?

a. 9%

b. 10.5%

c. 6%

d. 4.5%

e. 7.5%