Suppose the real risk-free rate is 1.1%, the average future inflation rate is 2.9%, a maturity premium of 0.07% per year to maturity applies, i.e., MRP= 0.07%(t), where t is the years to maturity. Suppose also that a liquidity premium of 0.7% and a default risk premium of 0.4% applies to A-rated corporate bonds. How much higher would the rate of return be on a 10-year A-rated corporate bond than on a 5-year Treasury bond. Here we assume that the pure expectations theory is NOT valid. \begin{tabular}{l} 1.45% \\ \hline 1.65% \\ 1.25% \\ 1.05% \\ 0.85% \end{tabular}