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You are considering an investment in 2 0 - year bonds issued by Moore Corporation. The bonds have no special covenants. The Wall Street Journal

You are considering an investment in 20-year bonds issued by Moore Corporation. The bonds have no special covenants. The Wall Street Journal reports that 1-year T-bills are currently earning 0.50 percent. Your broker has determined the following information about economic activity and Moore Corporation bonds:
Real risk-free rate =0.46%
Default risk premium =1.45%
Liquidity risk premium =0.80%
Maturity risk premium =0.95%
a. What is the inflation premium?
b. What is the fair interest rate on Moore Corporation 20-year bonds?
(For all requirements, round your percentage answers to 2 decimal places. (e.g.,32.16))

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