Kay Corporation's $5-$year bonds yield $5\mathrm{.}40\%$ and $5-$year T$-$bonds yield $3\mathrm{.}10\%.$ The real risk$-$free rate is $r^{**}=1\mathrm{.}60\%,$ the inflation premium for $5-$year bonds is IP $=1\mathrm{.}10\%,$ the default risk premium for Kay's bonds is $DRP=1\mathrm{.}30\%$ versus zero for T$-$bonds, and the maturity risk premium for all bonds is found with the formula MRP $=(t-1)0\mathrm{.}1\%,$ where $t=$ number of years to maturity. What is the liquidity premium $($LP$)$ on Kay's bonds?

a$.1\mathrm{.}60\%$

b$.2\mathrm{.}30\%$

c$.1\mathrm{.}00\%$

d$.1\mathrm{.}40\%$

e$.1\mathrm{.}90\%$