(a) Assume that a default risk of corporate bonds increases. What will happen to the risk premium? Explain your answer by using labelled graphs illustrating an equilibrium in a corporate bonds market and an equilibrium in a default-free bonds market. (10 marks) (b) Assume that people expect that the inflation rate will increase. What will happen to the price of bonds and the interest rate? Explain your answer by using a labelled graph illustrating an equilibrium for a bond market. Make sure to discuss the impact on the interest rate.