The real risk-free rate (r*) is 2.8% and is expected to remain constant. Inflation is expected to be 6% per year for each of the next three years and 5% thereafter. The maturity risk premium (MRP) is determined from the formula: 0.1 (t-1)%, where t is the security's maturity. The liquidity premium (LP) on all BTR warehousing's bonds is 1.05%. The following table shows the current relationship between bond ratings and default risk premiums (DRP) Rating Default Risk Premium U.S. Treasury 0.60% 0.80% 1.05% 1.45% BTR Warehousing issues 13-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. o 10.03% 9.88% 11.08% 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? O A AAA-rated bond has less default risk than a BB-rated bond. O The yield on a AAA-rated bond will be higher than the yield on a BB-rated bond