The real risk-free rate (r) is 2.8% and is expected to remain constant. Inflation is expected to be 5% per year for each of the next five years and 4% thereafter. The maturity risk premium (MRP) is determined from the formula: 0.1(t1)%, where t is the security's maturity, The liquidity premium (UP) on all Rink Machine Co.'s bonds is 1.05%. The following table shows the current relationship between bond ratings and default risk premiums (ORP): Rink Machine Co. issues thirteen-year, A-rated bonds. What is the vield on one of these bonds? Disregard cross-product terms; that is, if averaging is required, use the anthmetic average. 9.18% 9.03% 10.23% 5.85% Based on your understanding of the determinants of interest rates, if everything else remains the same, which of the following will be true? A BBB-rated bond has a lower default risk premium as compared to an AAA-rated bond. Higher inflation expectations increase the nominal interest rate demanded by investors