A T-bond that matures in 9 years has a yield of 4.5%. A 9-year corporate bond has a yield of 6%. Assume that the liquidity premium on the corporate bond is 0.5%. What is the default risk premium on the corporate bond? Select one: a. 2.0% b. 1.5% c. 4.5% d. 1.0% e. 0.5% Which of the following statements is most correct? Select one: a. If the Fed maintains a policy to expand money supply for several years, the entire yield curve will fall due to a higher expected future inflation. b. An upward-sloping Treasury yield curve suggests that long-term interest rates are higher than short-term interest rates. c. Immediately after the Fed announces to expand the money supply, the long-term interest rate will drop while the short-term interest rates will raise due to a higher expected future inflation. d. Other things equal, the interest rate in an area with young population would likely be lower than that in an area with old population e. Short-term interest rates are less volatile than long-term interest rates because the Fed operates mainly in the long-term sector