In 1999,the Nominal Interest Rate on a 30-Year Bond Was

Multiple Choice

In 1999,the nominal interest rate on a 30-year bond was around 5.85 percent.Assuming that investors have set these contracts expecting a real interest rate of 3 percent,what is the average rate of inflation that investors in the market are expecting over the next thirty years?

A) 2.85 percent
B) 3 percent
C) 5.85 percent
D) 8.85 percent