Question: 5 - year Treasury bonds yield 6 . 9 0 % . The inflation premium ( IP ) is 1 . 5 0 % ,

5-year Treasury bonds yield 6.90%. The inflation premium (IP) is 1.50%, and the maturity risk premium (MRP) on 5-year bonds is 0.6%. What is the real risk-free rate, r*?
a.6.21%
b.4.80%
c.4.73%
d.5.40%
e.6.30%

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