Assume that the real risk-free rate, r*, equals 3%, and is expected to be constant over time. Inflation is expected to be 3% in year 1, 4% in year 2, and 5% in year 3. Assume that the maturity risk premium=0. The interest rate on treasury securities that mature in four years is 8%. What is expected inflation in year 4?

A. 5%

B. 7%

C. 8%

D. 6%

E. 3%