Suppose 1-year T-bills currently yield 7.00% and the future inflation rate is expected to be constant at 4.70% per year.What is the real risk-free rate of return,r*? Disregard any cross-product terms,i.e. ,if averaging is required,use the arithmetic average.
A) 2.81%
B) 2.48%
C) 2.23%
D) 2.12%
E) 2.30%

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The Answer of Suppose 1-year T-bills currently yield 7.00% and the future inflation rate is expected to be constant at 4.70% per year.What is the real risk-free rate of return,r*? Disregard any cross-product terms,i.e. ,if averaging is required,use the arithmetic average.
A) 2.81%
B) 2.48%
C) 2.23%
D) 2.12%
E) 2.30%

Suppose 1-Year T-Bills Currently Yield 7