Answer:
B. 4%
Explanation:
The risk free return is equal to the one year treasury investment yield because the treasury investment is a government bond and the people have a guarantee by the government that they will be paid what they are owed, thus a 1 year treasury investment yield is often looked at as a risk free rate of return. In this question the one year treasury yield is 4% so the risk free rate of return is also 4%.
