Firm AAA' s five year bonds' yield 10. -6.20%; Five year Treasury bonds, yield = 4.40%. Real risk-free rate, r* = 2.5%. Expected inflation for five yar bonds, IP-1.50%. Liquidity premium for AAA's bond, LP 0.5% and zero for Treasury bonds. Maturity risk premium for all bonds, both AAA and Treasury bond, MRP- (t - 1) 0.1%, where t- number of years to maturity. Calculate for the default risk premium (DRP) on AAA's bonds? (hint: t.,id =r*+1P+MRP+RP a. b. c. d. 1.19% 1.30% 1.41% 1.25% 1 0. Firm AAA's five year bonds yield- 7% and a five year Treasury bonds yield 48. The real risk free rate, r* 2.5%; inflation premium for five year bonds, IP 1.50%; the default risk premium for AAA's bonds DRP = 2% and zero for Treasury bonds; maturity risk premium for all bonds, MRP (t - 1) 0.1%, where t number of years t maturity. Calculate for iquidity on AAA' s bonds? a. b. c. d. 1.50% 1.30% 1.00% 1.40%