A 14-year corporate bond, with a coupon rate of 10% has a price of $918. Assume that the real risk-free rate, r*, is 3.20%. Inflation is expected to average 1.50% a year for the next 5 years, and average 4.30% each year thereafter. Assume that the liquidity premium is 2.00%, but there is no maturity risk premium.

a. Find the yield of the corporate bond.

b. Find the corporate bonds default risk premium.

c. What would be the price of the bond if its coupon rate is equal to the market yield?