Treasury securities that mature in 6 years currently have an interest rate of 7.75 percent. Inflation is expected to be 5 percent in each of the next three years and 6 percent each year thereafter. The maturity risk premium is estimated to be 0.10% (t 1), where t is equal to the maturity of the bond (i.e., the maturity risk premium of a one-year bond is zero). The real risk-free rate is assumed to be constant over time. What is the real risk-free rate of interest?

Group of answer choices

2.50%

3.00%

1.75%

1.00%