Question 4 (6.25 points) The real risk-free rate, r*, is 2.5%. Inflation is expected to average 2.8% a year for the next 4 years, after which time inflation is expected to average 3.75% a year. Assume that there is no maturity risk premium. An 8-year corporate bond has a yield of 8%, which includes a liquidity premium of 0.95%. What is its default risk premium? OA) 0.88% B) 1.58% OC) 1.68% D) 1.08% E) 1.28%