Angelo Purchased a 7% Annual Coupon Bond One Year Ago

Angelo purchased a 7% annual coupon bond one year ago for $987. At the time of purchase, the bond had six years to maturity. Over the past year inflation has been 3.2%. The market required
Return on this bond today is 8%. If Angelo sells the bond today at the market price, what real rate of
Return will he realize on this investment?

A) -1.16%
B) 1.13%
C) 1.17%
D) 4.33%
E) 4.36%