A ten-year U.S. Treasury bond has a 3.50 percent interest rate, while a same maturity corporate bond

Question:

A ten-year U.S. Treasury bond has a 3.50 percent interest rate, while a same corporate bond has a 5.25 percent interest rate. Real interest rates and inflation rate expectations would be the same for the two bonds. If a default risk premium of 1.50 percentage points is estimated for the corporate bond, determine the liquidity premium for the corporate bond.
Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...