9- Calculate interest rates The real risk-free rate (r*) is 2.8% and is expected to remain constant. Inflation is expected to be 6% per year for each of the next four years and 5% thereafter. The maturity risk premium (MRP) is determined from the formula: 0.1(t - 1)%, where t is the security's maturity. The Liquidity premium , LP) on all Nitreca Chemicals Inc.'s bonds is 1.05%. The following table shows the current. relationship between bond ratings and default risk premiums (PRP):Nitreca chemicals Inc. issues Seven-year, AA-rated bonds. What is the yield on one Of these bonds? Disregard cross product terms; that is, if averaging is required, use the arithmetic average. 9.77% 10.22% 5.25% 10.82% Based on your understanding of the determinants of interest rates. if everything else remains the same, which o following will be true? The yield on a AAA-rated bond will be higher than the yield on a BB-rated bond. The yield on a AAA-rated bond will be lower than the yield on a AA-rated bond. 9- Calculate interest rates The real risk-free rate (r*) is 2.8% and is expected to remain constant. Inflation is expected to be 6% per year for each of the next four years and 5% thereafter. The maturity risk premium (MRP) is determined from the formula: 0.1(t - 1)%, where t is the security's maturity. The Liquidity premium , LP) on all Nitreca Chemicals Inc.'s bonds is 1.05%. The following table shows the current. relationship between bond ratings and default risk premiums (PRP):Nitreca chemicals Inc. issues Seven-year, AA-rated bonds. What is the yield on one Of these bonds? Disregard cross product terms; that is, if averaging is required, use the arithmetic average. 9.77% 10.22% 5.25% 10.82% Based on your understanding of the determinants of interest rates. if everything else remains the same, which o following will be true? The yield on a AAA-rated bond will be higher than the yield on a BB-rated bond. The yield on a AAA-rated bond will be lower than the yield on a AA-rated bond