The real risk-free rate (r) is 2.8% and is expected to remain constant. Inflation is expected to be 8% per year for each of the next three years and 7% thereafter. The maturity risk premium (MRP) is determined from the formula: 0.1(t1)%, where t is the security's maturity. The liquidity premium (LP) on all Tahoe Hydroponics's bonds is 0.55%. The following table shows the current relationship between bond ratings and default risk premiums (DRP): Tahoe Hydroponics issues 15-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. 12.20% 5.55% 11.35% 12.75% Based on your understanding of the determinants of interest rates, if everything else remains the same, which of the following The yield on an AA-rated bond will be higher than the yield on a BB-rated bond. The yield on an AAA-rated bond will be lower than the yield on an AA-rated bond