The real risk-free rate (r) is 2.8% and is expected to remain constant. Inflation is expected to be 3%, per year for each of the next four years and 2% thereafter. The maturity risk premium (MRP) is determined from the formula: 0.1(t1)%, where t is the secunty's maturity, The liquidity premilum (LP) on all Nitreca Chemicals Inci's bonds is 0.55%. The following table shows the current relationship between bond ratings and default risk premiums (DRP): Nitreca Chemicals Inc, issues nine-year, AA-rated bonds. What is the yield on one of these bonds? Disregard cross-product terms; that is, If averaging is required, use the arithmetic average. 6.59% 6.84% 7.39% 4.95% Based on your understanding of the determinants of interest rates, if everything else remains the same, which of the following will be true? The vield on an MA-rated bond will be lower than the vield on an A-rated bond. A. BBB-rated bond has a lower default risk premium as compared to an MA-rated bond