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 1.55 percent. Your broker has determined the following information about economic activity and Moore Corporation bonds: Real risk-free rate = 0.45% Default risk premium = 1.45% Liquidity risk premium = 1.10% Maturity risk premium = 2.05%

What is the inflation Premium? (Round your answer to 2 decimal places.)

Expected IP______%

What is the fair interest rate on Moore Corporation 30-year bonds? (Round your answer to 2 decimal places.)

Fair interest rate_____%