In Lending to Vanessa, Alison Expects the Inflation Rate to Be

In lending to Vanessa, Alison expects the inflation rate to be 8% over the next year. Vanessa agrees to pay Alison a 10% interest rate on the loan, but Vanessa expects inflation to be 9%. If the actual inflation rate is 9%:

A) the real rate of interest is 1%.
B) the real rate of interest is 9%.
C) Vanessa ends up paying a lower real interest rate than she had expected.
D) Alison ends up receiving a higher real interest rate than she had expected.