Treasury securities that mature in 10 years currently have an interest rate of 7%.

Inflation is expected to be 1.7% in each of the next three years and 2% each year after the third year.

The MRP is estimated to be 0.2% (t - 1), where t is equal to the maturity of the bond

The DRP is estimated to be 0.1% (t - 1), where t is equal to the maturity of the bond

The LP is estimated to be 0.8%

What is the real risk-free rate of interest?

A. 2.50%

B. 3.29%

C. 2.68%

D. 1.59%