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4. Moore Corporation has 5-year bonds, Inflation premium (IP) on a 5 year bond is 1.00%. The real risk-free rate is r*-2.80% , the default

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4. Moore Corporation has 5-year bonds, Inflation premium (IP) on a 5 year bond is 1.00%. The real risk-free rate is r*-2.80% , the default risk premium for Moore's bonds is DRP- 0.85% versus zero for T-bonds, the liguidity premium on Moore's bonds is LP 1.20%, and the maturity risk premium for all bonds is found with the formula MRP-(t-1) x 0.1%, where t number of years to maturity. What is the yield on Moore Corporation's 5-year bonds? a. 1.40% b. 6.85% c. 1.71 % d. 6.25%

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