(Solution) - The real risk free rate is 3 55 inflation is expected to -(2025 Original AI-Free Solution)

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The real risk-free rate is 3.55%, inflation is expected to be 2.55% this year, and the maturity risk premium is zero. Taking account of the cross-product term, i.e., not ignoring it, what is the equilibrium rate of return on a 1-year Treasury bond?
a. 5.595%
b. 5.757%
c. 6.376%
d. 6.191%
e. 5.138%