Back to Assignment Attempts: 4. Calculating interest rates Keep the Highest: 1/2 The real risk-free rate ( *) is 2.8% and is expected to remain constant. Inflation is expected to be 5% per year for each of the next two years and 4% thereafter The maturity risk premium (MRP) is determined from the formula: Out-1)%, where t is the security's maturity The liquidity premium (LP) on all Moq Computer Corp.'s bonds is 1.05%. The following table shows the current relationship between bond ratings and default risk premiums (DRP) Rating Default Risk Premium U.S. Treasury 0.60% 0.80% 145% Mog Computer Corp, Issues 14-year, AA-rated bonds, What is the yield on one of these bonds? Disregard average. O 10.09% 9.04% 8.79% Q 5.95% Based on your understanding following will be true? of the determinants of interest rates, if everything else remains the same, which of the O A BBB-rated bond has a lower default risk premium as compared to a AMA-rated bond The yield on a AAA-rated bond will be lower than the yield on a AA-rated bond