You Are Given the Following Data Assume That a Highly Liquid Market Does Not Exist for real

You are given the following data: $\begin{array}{llcc} \text {r*= real risk-free rate } &4\%\\ \text {Constant inflation premium } &7\%\\ \text {Maturity risk premium } &1\%\\ \text { Default risk premium for AAA bonds } &3\%\\ \text { Liquidity premium for long-term T-bonds } &2\%\\\end{array}$
Assume that a highly liquid market does not exist for long-term T-bonds, and the expected rate of inflation is a
Constant.Given these conditions, the nominal risk-free rate for T-bills is
, and the rate on long-term Treasury
Bonds is .

A) 4%; 14%
B) 4%; 15%
C) 11%; 14%
D) 11%; 15%
E) 11%; 17%