Real interest rates measure the actual return an investor expects to receive after subtracting the effects of inflation and other risks from a stated (nominal) rate of return. When numbers are low, say less than 10%, we can approximate the relationship between nominal rates (k), real interest rates (k*) and inflation for a default risk-free asset (i.e., T-Bills) by the Fisher approximation KRF = k* + IP, where IP is compensation for expected inflation (an inflation premium). Suppose k= 0.25% and IP= 1.25%. What is the real interest rate the investor in the T-Bill will receive? -1.5% O 1% O 1.5% 0 -1%