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Keys Corporation's 5-year bonds yield 6.90% and 5-year T-bonds yield 4.40%. The real risk-free rate is r* = 2.5%, the inflation premium for 5-year bonds

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Keys Corporation's 5-year bonds yield 6.90% and 5-year T-bonds yield 4.40%. The real risk-free rate is r* = 2.5%, the inflation premium for 5-year bonds is IP = 1.50%, the liquidity premium for Keys' bonds is LP = 0.5% versus zero for T-bonds, and the maturity risk premium for all bonds is found with the formula MRP = (t-1) x 0.1%, where t = number of years to maturity. What is the default risk premium (DRP) on Keys' bonds? 1.74% 2.00% 2.50% O 1.56% 1.78%

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