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The real risk-free rate is 0.25%. Inflation is expected to average 1.0% a year for the next 2 years, after which time inflation is expected

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The real risk-free rate is 0.25%. Inflation is expected to average 1.0% a year for the next 2 years, after which time inflation is expected to average 2.00% a year. Assume that there is no maturity risk premium. A 28-year corporate bond has a yield of 28.0%, which includes a liquidity premium of 0.50%. What is its default risk premium? 25.321% 25.821% 26.250% 25.250%

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