The one-year interest rate over the next 10 years will be 3%, 4.5%, 6%, 7.5%, 9%, 10.5%, 13%, 14.5%, 16%, 17.5%.

Now assume that the investor prefers holding short-term bonds. A liquidity premium of 15 basis points is required for each year of a bonds maturity. What will be the interest rates on a 9-year bond?

a. 7.65%

b. 8.38%

c. 9.84%

d. 10.68%