Question: 5 - year Treasury bonds yield 5 . 8 % . The inflation premium ( IP ) is 1 . 9 % , and the

5-year Treasury bonds yield 5.8%. The inflation premium (IP) is 1.9%, and the maturity risk premium (MRP) on 5-year bonds is 0.4%. What is the real risk-free rate, r*?
Select the correct answer.
a.3.82%
b.3.50%
c.4.14%
d.4.46%
e.4.78%

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