An analyst wants to estimate the equity risk premium for Ecuador, an emerging market country, using the melded country risk premium approach (multiplying country's default spread by the volatility of its equity markets relative to the volatility of its government bond market). The analyst gathered the following information:

US Equity market premium (mature market) is 4.5%

US default spread is 0.1%

US government bond market volatility is 6.5

US's equity market volatility is 15%

Volatility of the S&P500 is 12%

Ecuador's default spread is 2.5%

Ecuador's government bond market volatility is 9% for 10-year bonds and 6% for 1-year bonds

Ecuador's equity market volatility is 22% Estimate the equity risk premium for Ecuador?

a. 12.96% O b. 10.6% O c. 10.3% O d. 9.1% e. Cannot tell from the provided information.