Question: 5 - year Treasury bonds yield 6 . 0 0 % . The inflation premium ( IP ) is 2 . 1 0 % ,

5-year Treasury bonds yield 6.00%. The inflation premium (IP) is 2.10%, and the maturity risk premium (MRP) on 5-year bonds is 0.5%.
What is the real risk-free rate, r*?
a.3.40%
b.5.50%
c.5.39%
d.3.3%
e.3.90%

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