need help with #2

FIN 3020 HW 3.5 - Interest Rates NAME r=r* + IP + DRP + LP + MRP 1. Given the following information: Real Risk-Free Rate Inflation Premium Maturity Risk Premium Default Risk Premium Liquidity Risk Premium 2.0% 3.0% 1.5% 2.5% 1.0% Estimate the required rates of interest on the bond types below. Long-term (30-year) Corporate bond r: 2.0+3.0 Long-term (30 year) Treasury bond Short-term (30-day) Corporate bond 2. The real risk-free rate is 4%, and the annual inflation rate is expected to be 2% next year, 3% in year two, and 5% in year three. Three-year Treasury securities yield 10%. What is the maturity risk premium for the 3-year treasury