The real risk free rate() is 2.8% and is expected to remain constant Inflation is expected to be 5% per year for each of the next two years and 4% thereafter ols The maturity risk premium (MRP) is determined from the formula: 0.160 - 19%, where is the security's maturity. The squidity premium (L) on all Smith and Carter Inc.'s bonds is 0.55%. The following table shows the current relationship between bond ratings and default risk premiums (ORP) Default Risk Premium Rating U.S. Treasury AAA AA 0.60% 0.80% 1.05% BBB 1.45% ory Smith and Carter Inc. issues thirteen-year AA-rated bonds. What is the yield on one of these bonds? Disrepard crowo-product terms, that is, averaging is required, use the arithmetic average 8.95 5.3596 8.309 9.5096 Based on your understanding of the determinants of interest rates, it everything else remains the same, which of the following will be true? The yield on an AAA-rated bond will be lower than the yield on an AA-rated bond, A BBB-rated bond has a lower default risk premium as compared to an AAA-rated bond