USE EXCEL Review the Bond Table below; all bonds have semi$-$annual payments.

Security Coupon Rate Face Value Price

$1-$yr Treasury $0\mathrm{.}00\%$ $$1,000$ $ $965\mathrm{.}90$

$5-$yr Treasury $4\mathrm{.}50\%$ $$1,000$ $ $991\mathrm{.}18$

$10-$yr Treasury $5\mathrm{.}00\%$ $$1,000$ $ $976\mathrm{.}94$

$5-$yr Corporate $4\mathrm{.}80\%$ $$1,000$ $ $912\mathrm{.}46$

$($rated A$)$

$10-$year Corporate $8\mathrm{.}40\%$ $$1,000$ $$1,044\mathrm{.}66$

$($rated BBB$)$

What is the risk$-$free rate $($rf$)?$

Multiple Choice

$0\mathrm{.}00\%$

$3\mathrm{.}50\%$

$3\mathrm{.}25\%$

$2\mathrm{.}50\%$

$1\mathrm{.}75\%$