Answer:
The real risk-free rate is 2.1%
Explanation:
Typically, the return on investment is denoted by the below formula:
return on investment=real risk-free rate+inflation premium+default risk premium+liquidity premium+maturity premium
return on investment is 4.4%
inflation premium is 1.9%
maturity risk premium is 0.4%
liquidity premium is 0%
default risk is also assumed to zero as the treasury bond is backed by the government whose level of default is zero
real risk-free rate=return on investment-inflation premium-default risk-liquidity premium-maturity premium
real risk-free rate=4.4%-1.9%-0%-0%-0.4%
real risk-free rate=2.1%