The Current 1-Year Treasury Rate Is 10 Per Cent

The current 1-year Treasury rate is 10 per cent. It is predicted that the annual inflation rate is going to be 0.50 per cent higher than originally expected. The higher inflation forecasts reflect unexpectedly strong macroeconomic conditions. What is the current inflation premium? (Assume that the real rate of interest is 9.0 per cent.)

A) 0.5%.
B) 1%.
C) 1.5%.
D) 11%.