1. Crockett Corporation's 5-year bonds yield 6.35%, and 5-year T-bonds yield 4.75%. The real risk-free rate is r* = 5.63%, the default risk premium for Crockett's bonds is DRP = 2.00% versus zero for T-bonds, the liquidity premium on Crockett's bonds is LP = 2.90% versus zero for T bonds, and the maturity risk premium for all bonds is found with the formula MRP = (t 1) 0.1%, where t = number of years to maturity. What inflation premium (IP) is built into 5-year bond yields?

2. Zoom Corporation's 5-year bonds yield 8.00%, and 5-year T-bonds yield 4.80%. The real risk-free rate is r* = 2.75%, the inflation premium for 5-year bonds is IP = 1.65%, the default risk premium for Zoom's bonds is DRP = 1.20% versus zero for T-bonds, and the maturity risk premium for all bonds is found with the formula MRP = (t 1) 0.1%, where t = number of years to maturity. What is the liquidity premium (LP) on Zoom's bonds?

3. Suppose 10-year T-bonds have a yield of 5.30% and 10-year corporate bonds yield 6.75%. Also, corporate bonds have a 0.25% liquidity premium versus a zero liquidity premium for T-bonds, and the maturity risk premium on both Treasury and corporate 10-year bonds is 1.15%. What is the default risk premium on corporate bonds?

4. 5-year Treasury bonds yield 5.5%. The inflation premium (IP) is 1.9%, and the maturity risk premium (MRP) on 5-year T-bonds is 0.4%. There is no liquidity premium on these bonds. What is the real risk-free rate, r*?

5. If 10-year T-bonds have a yield of 6.2%, 10-year corporate bonds yield 15.8%, the maturity risk premium on all 10-year bonds is 3.1%, and corporate bonds have a 0.4% liquidity premium versus a zero liquidity premium for T-bonds, what is the default risk premium on the corporate bond?

6. The Canadian government issues a Treasury bond that matures in 15 years has a yield of 7%. A French firm issues a 15-year corporate bond has a yield of 9.5%. Assume that the liquidity premium on the corporate bond is 2.5%. What is the default risk premium on the corporate bond?

7. Zoom Inc's 6-year bonds yield 6.50%. The real risk-free rate is r* = 0.5%, the default risk premium for Zoom's bonds is DRP = 0.40%, the liquidity premium on Zoom's bonds is LP = 2.2% versus zero on T-bonds, and the inflation premium (IP) is 1.5%. What is the maturity risk premium (MRP) on all 6-year bonds?