Excel Online Structured Activity: Interest rate premiums A 5-year Treasury bond has a 4.25% yield. A 10-year Treasury bond yields 6.45%, and a 10-year corporate bond yields 9%. The market expects that inflation will average 3.6% over the next 10 years (IP20 - 3.6%). Assume that there is no maturity risk premium (MRP = 0) and that the annual real risk free rate, r*, will remain constant over the next 10 years. (Hint: Remember that the default risk premium and the liquidity premium are zero for Treasury securities: DRP - LP -0.) A 5-year corporate bond has the same default risk premium and liquidity premium as the 10-year corporate bond described. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. X Open spreadsheet What is the yield on this 5-year corporate bond? Round your answer to two decimal places. Check My Work Reset Problem Home Insert Formulas Data Review View Tell me Help X Cut v Arial 10 A A am Le Copy Paste BI U Dab a-A- Format Painter Clipboard Font Alignment B . D E A Interest rate premiums 4.25% 6.45% 9.00% 3.60% 0.00% 0.00% 0.00% + LP 610 C10 5-year Treasury yield (T3) 10-year Treasury yield (T10) 5 10-year Corporate yield (C10) 6 Inflation Premium over 10 years (IP 10) 7 Maturity Risk Premium (MRP) 8 DRP Treasury 9 LP Treasury 10 DRP C5 +LPcs = DRPC 11 12 Real risk-free rate, r* 13 14 Inflation premium over 5 years (IP3) 15 16 DRP 10+LP 10 17 18 5-year Corporate yield (C5) 19 20 21 Formulas #N/A #NA #N/A #N/A