Assume that the real risk-free rate is r* = 1% and the average expected inflation rate is 3% for each future year. The default risk premium and liquidity premium for Bond X are each 1%, and the applicable maturity risk premium is 2%. Which of the following statement is correct? A.Bond X is more likely a Treasury bond than a corporate bond. B.Bond X is more likely to have a 3-month maturity than a 20-year maturity. C.Bond X is more likely to have a 20-year maturity than a 3-month maturity. D.both a and b are correct. E.both a and d are correct.

( Chegg answer option D-"That means statements A and B are both correct under given circumstances" seems to be wrong. Please explain.)

Thanks