(Roof interest rates approximation mothod) The CFO of your firm has asked you for an approximate answer to this question: What was the increase in real purchasing power associated with both 3-month Treasury bits and 30 year Treasury bonds? Assume that the current 3-month Treasury bill rate is 4.87%, the 30-year Treasury bond rate is 8.34%, and the inflation rate is 3.44%. Also, the chief fnancial officer wants a short explanation should the 3-month real rate tum out to be less than the 30.year real rate The Inferred roal interest rate of Treasury bills is % (Round to two decimal plant) The inferred roal interest rate of Treasury bonds is (Round to two decimal places.) Should the 3-month real interest rate turn out to be less than the 30-yone real interest rato? (Select the best choice below.) OA. Yes, the 30-year real interest rate should exceed the 3-month real interest rate because the goverment demands tower rates for lending short term. OB. Yes, the 30-year real interest rate should exceed the 3-month rent interest rate because of the maturity premium demanded by investors OC. Yes, the 30 year reat interest rate should exceed the 3-month rent interest rate because inflation only affects the long-term secunty OD. Yes, the 30-yont real interest rate should exceed the 3-month roal interest rate because the two securities are sold in different markets P Click to select your answer. Chapter 3 Homework DUBAT 11:59PM Score 1 of questions | Chapter 3 QUE CHEAT 11 PM Score of 2 temps G lcd (Real interest rates: approximation method) The CFO of your firm has asked you for an approximate answer to this question: What was the increase in real purchasing power associated with both 3-month Treasury bills and 30-year Treasury bonds? Assume that the current 3-month Treasury bill rate is 4.87%, the 30-year Treasury bond rate is 8.34%, and the inflation rate is 3.44%. Also, the chief financial officer wants a short explanation should the 3-month real rate turn out to be less than the 30-year real rate. The inferred real interest rate of Treasury bills is % (Round to two decimal places.) The inferred real interest rate of Treasury bonds is % (Round to two decimal places.) Should the 3-month real interest rate tum out to be less than the 30-year real Interest rate? (Select the best choice below.) A. Yes, the 30-year real interest rate should exceed the 3-month real interest rate because the goverment demands lower rates for lending short term. B. Yes, the 30-year real interest rate should exceed the 3-month real interest rate because of the maturity premium demanded by investors. OC. Yes, the 30-year real interest rate should exceed the 3-month real interest rate because inflation only affects the long-term security OD. Yes, the 30-year real interest rate should exceed the 3-month real interest rate because the two securities are sold in different markets