The real interest rate is 1.9% per year. If the inflation rate is expected to be 2.4% per year for the next two years and 2.8% per year thereafter, what is the annual yield on four-year Treasury securities?

Question 2 options:

1)

4.9%

2)

4.2%

3)

4.3%

4)

4.5%

5)

4.7%