Koy Corporation's $5-$year bonds yield $8\mathrm{.}15\%,$ and $5-$year T$-$bonds yield $4\mathrm{.}80\%.$ The real risk$-$free rate is $r^{**}=2\mathrm{.}80\%,$ the inflation premium for $5-$year bonds is IP $=1\mathrm{.}60\%,$ the liquidity

premium for Koy's bonds is LP $=0\mathrm{.}75\%$ 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 default risk premium $($DRP$)$ on Koy's bonds?

a$.2\mathrm{.}60\%$

b$.2\mathrm{.}20\%$

c$.3\mathrm{.}35\%$

d$.2\mathrm{.}95\%$

e$.4\mathrm{.}10\%$Koy Corporation's $5-$year bonds yield $8\mathrm{.}15\%,$ and $5-$year T$-$bonds yield $4\mathrm{.}80\%.$ The real risk$-$free rate is r$*=2\mathrm{.}80\%,$ the inflation premium for $5-$year bonds is IP $=1\mathrm{.}60\%,$ the liquidity premium for Koy's bonds is LP $=0\mathrm{.}75\%$ versus zero for T$-$bonds, and the maturity risk premium for all bonds is found with the formula MRP $=($t $-1)\backslash$times $0\mathrm{.}1\%,$ where t $=$ number of years to maturity. What is the default risk premium $($DRP$)$ on Koy's bonds?

a$.2\mathrm{.}60\%$

b$.2\mathrm{.}20\%$

c$.3\mathrm{.}35\%$

d$.2\mathrm{.}95\%$

e$.4\mathrm{.}10\%$