During the period 1981 to 2005, the average yield on 3-Month U.S. Treasury bills was 5.68%, the average inflation rate was 3.7%, the average yield on 30-year Treasury bonds was 7.82%, and the average return on Aaa-Rated Corporate Bonds was 8.66%. The real risk-free short-term interest rate is

a. 2.14%.

b. 2.32%.

c. 2.78%.

d. 4.96%.