A bond with a face value of $

$1$

$,$

$0$

$0$

$0$

$,$

$$coupon rate of

$5$

$\%$

$$and

$1$

$$year to maturity is priced today at its face value. Suppose that expected inflation is

$2$

$\%$

$.$

$$What is the annual real return of the bond?

A

$.$

$2$

$.$

$9$

$\%$

$$B

$.$

$7$

$.$

$1$

$\%$

$$C

$.$

$-$

$2$

$.$

$1$

$\%$

$$D

$.$

$5$

$.$

$7$

$\%$