Question 16 of 30 MC.05.064.Algo Check My Work The Gergen Group's 5-year bonds yield 6.85%, and 5-year T-bonds yield 4.75%. The real risk-free rate is r* = 4%, the default risk premium for Gergen's bonds is DRP 0.85% versus zero for T-bonds, the liquidity premium on Gergen's bonds is LP = 1.25%, and the maturity risk premium for all bonds is found with the formula MRP-(t-1) X 0.1%, where t number of yours to maturity. What is the inflation premium (IP) on 5-year bonds? Select the correct answer. a. 0.03% b. 0.35% c. 0.19% d. 0.5196 e. 0.6794