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6. Kern Corporation's 5-year bonds yield 7.30% and 5 -year T-bonds yield 4.10%. The real risk-free rate is r=2.5%, the default risk premium for Kern's
6. Kern Corporation's 5-year bonds yield 7.30% and 5 -year T-bonds yield 4.10%. The real risk-free rate is r=2.5%, the default risk premium for Kern's bonds is DRP =1.90% versus zero for T-bonds, the liquidity premium on Kern's bonds is LP =1.3%, and the maturity risk premium for all bonds is found with the formula MRP=(t1)0.1%, where t= number of years to maturity. What is the inflation premium (IP) on all 5-year bonds
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