Given the following data, find the expected rate of inflation during the next year. r*, the real risk-free rate = 3% maturity risk premium on 10-year Treasury bonds = 2%, but zero on 1-year bonds default risk premium on 10-year, A-rated bonds = 1.5% liquidity premium = 0% nominal interest rate, r, on 1-year Treasury bonds = 8.5% 3.5% 4.5% 5.5% 6.5% 7.5%