3. Calculating interest rates The real risk-free rate ( ) is 2.896 and is expected to remain constant. inflation is expected to be 3% per year for each of the next three years and 2% thereafter: The maturity risk premium (MRP) is determined from the formula: 0.1(t1)%, where t is the security's maturity. The liquidity premium { (LP) on at Moq Computer Corp.'s bonds is 1.05\%. The following table shows the current relationship between bond ratings and default risk premiums (DRP): Mog Computer Corp. issues thirteen-yeac, AA-roted bonds, What is the yield on one of these bonds? Disregard cross-product terms; that is, if averaging is required, use the anthmetic average. 5.85% 7.034 B.06\%: 6,88>4 Based on your understanding of the determinants of interest rates, if everything else remalns the same, which of the foliowing will be true? The yield on an AAA-rated bond will be higher than the yield on a BB.rated bond. Higher infiation expectations increase the nominal interest rate demanded by imvestors