The real risk free rate of return is 1.8%. Inflation is expected to average 1.4% for the next 5 years. After that time, it is expected to average 3.8% per year. If there is no maturity risk premium and a 10-year corporate bond has liquidity premium of .7% and a yield of 8.2%, what is its default risk premium?

a. 1.9%

b. 4.3%

c. 7%

d. 3.1%

e. none of the above