30) Determinants of Interest Rate for Individual Securities You are considering an investment in 30 -year bonds issued by a corporation. The bonds have no special covenants. The Wall Street Journal reports that 1-year T-bills are currently earning 5.20 percent. Your broker has determined the following information about economic activity and the corporation bonds: Real interest rate =4.85% Default risk premium =3.95% Liquidity risk premium =1.10% Maturity risk premium =3.70% 30) Determinants of Interest Rate for Individual Securities You are considering an investment in 30 year bonds issued by a corporation. The bonds have no special covenants. The Wall Street Journal reports that 1 -year T-bills are Real interest rate =4.85% Default risk premium =3.95% Liquidity risk premium =1.10% Maturity risk premium =3.70% What is the inflation premium? What is the fair interest rate on the corporation's 30 -year bonds? A) 5.20% and 18.80%, respectively B) .35% and 13.60%, respectively C) .35% and 13.95%, respectively D) .35% and 2.79%, respectively