You are considering an investment in 30-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 0.30 percent. Your broker has determined the following information about economic activity and Moore Corporation bonds: Real risk-free rate = 0.25% Default risk premium = 1.05% Liquidity risk premium = 0.70% Maturity risk premium = 0.65%

a. What is the inflation premium?

b. What is the fair interest rate on Moore Corporation 30-year bonds? (For all requirements, round your answers to 2 decimal places. (e.g., 32.16))