Suppose the real risk-free rate is 4.20%, the average expected future inflation rate is 6.50%, and a maturity risk premium of 0.10% per year to...

24.Suppose the real risk-free rate is 4.20%, the average expected future inflation rate is 6.50%, and a maturity risk premium of 0.10% per year to maturity applies, i.e., MRP = 0.10%(t), where t is the years to maturity, hence the pure expectations theory is NOT valid. What rate of return would you expect on a 4-year Treasury security? Disregard cross-product terms, i.e., if averaging is required, use the arithmetic average. a.13.54% b.11.10% c.8.77% d.10.21% e.10.88%