A firms ten year bonds yield = 10.00%, and ten year Treasury bonds yield = 6%. The real risk free rate = 3.0%, the inflation premium for ten year bonds = 2.1%, the liquidity premium for the firm's bonds = 1% and zero for T-bonds. Maturity risk premium for all bonds is based on the following equation: MRP = (t 1) 0.1%, where t = number of years to maturity.

1.Calculate corporate bonds default risk premium.

2.If default risk premium for the firm's bonds = 1% and zero for T-bonds. Calculate corporate bonds liquidity risk premium.

3. If the liquidity premium for the firm's bonds = 2% and zero for T-bonds, the default risk premium for the firm's bonds = 2% and zero for T-bonds. Calculate the inflation premium (IP) on all ten year bonds.

4. If the liquidity premium for the firm's bonds = 2% and zero for T-bonds, the default risk premium for the firm's bonds = 2% and zero for T-bonds, and the inflation premium = 1.5%. Calculate the maturity risk premium on all ten year bonds?