1. [4 points] You are considering purchasing some AAA rated Verizon corporate bonds and want to compare yields for bonds with different maturities. You know that the real rate of interest is 1%. You have also discovered the following information: Term to Inflation Default Risk Liquidity/Marketability Maturity Risk Maturity Premium Premium Risk Premium Premium 1.25% .25% 0% 0% 1.35% .5% .6% .03% 5 years 2% .75 % 1% .05% 10 years 3% 2% .10% 1 year 3 years a. Calculate the nominal rate for 1,3, and 5-year bonds in the table b. You are quoted a nominal rate of 7.1% for the 10-year bond. Determine the Default Risk Premium