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Kop Corporation's 5 - year bonds yield 6 . 5 0 % , and T - bonds with the same maturity yield 3 . 0

Kop Corporation's 5-year bonds yield 6.50%, and T-bonds with the same maturity yield 3.00%. The default risk premium for Kop's bonds is DRP =0.40%, the liquidity premium on Kop's bonds is LP =3.10% versus zero on T-bonds, the inflation premium (IP) is 1.50%, and the maturity risk premium (MRP) on 5-year bonds is 0.40%. What is the real risk-free rate, r**?
1.10%
1.01%
1.21%?**
1.14%
0.99%
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