Bob Young, a management trainee at a large New York$-$based bank, is trying to estimate the real rate of return expected by

investors. He notes that the $12-$month T$-$bill currently yields $3$ percent, and consumer prices have been rising steadily at a $2\%$ rate

for several years. What should Bob's estimate of the real rate be$?$

$5\%$

$1\%$

$3\%$

$2\%$