On a particular day the Wall Street Journal reports that the 91-day on-the-run U. S. Treasury bill is yielding 6 percent and the 30-year on-the-run U. S. Treasury bond is yielding 8 percent. In the market, default risk premiums average 2 percent, maturity risk premiums average 2 percent and liquidity risk premiums average 1 percent. If expected inflation is 3 percent, the real risk free rate of interest is:()
A. -2%.
B. 0%.
C. 3%.