Suppose the real risk-free rate is 2.5%, the average future inflation rate is 2.3%, 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 1% and a default risk premium of 0.7% applies to A-rated corporate bonds. How much higher would the rate of return be on a 7-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}{|r|} \hline 1.04% \\ \hline 1.24% \\ \hline 1.64% \\ \hline 1.44% \\ \hline 1.84% \\ \hline \end{tabular}