The real risk-tree rate (r) is 2.8% and is expected to remain constant. Inflation is expected to be 8% per year-for each of the next four years and 7% thereaftec The matunty nsk premium (MRP) is determined from the formula: 0.1(t - 1 ) %, where t is the security's maturity. The liquidity premium (LP) on all Berth Constructoon incis bonds is 0.55%. The following table thows the current relationshap between bond ratings and default risk premiums (ORP): Berth Construction inc. issues sx Year, Ah-rated bands. What is the vield on one of these boods? Diaregard aross product terms; that is, if averaging is requirnd, ute the arithrietic average. 11.6271 12.124% 11.275 Baved on your understanding of the determinants of interest rates, if everything cise rertaains the same, which of the fodlowing win be trie? A Bbth-rated bond has a lower detavit rask prenium as coenpared to an AAA-rated bond. In theory, the yield on a bond with a longer maturity wi be hagher than the yield on a bond wieh a shorter maturity