Question $15$ of $40$

If the nominal rate of interest is $4\mathrm{.}5\%,$ the rate of inflation is $2\%,$ and the risk premium is $1\mathrm{.}5\%,$ the risk$-$free rate is:

$3\mathrm{.}5\%$

$1\mathrm{.}5\%$

$2\mathrm{.}5\%$

$1\%$