Niendorf Corporation's 5-year bonds yield 8.85%, and 5-year T-bonds yield 6.00%. The real risk-free rate is r* = 3.45%, the inflation premium for 5-year bonds is IP = 2.15%, the default risk premium for Niendorf's bonds is DRP = 1.20% versus zero for T-bonds, and the maturity risk premium for all bonds is found with the formula MRP = (t - 1) 0.1%, where t = number of years to maturity. What is the liquidity premium (LP) on Niendorf's bonds?

a. 1.10%

b. 2.85%

c. 2.05%

d. 2.45%

e. 1.65%