You are considering an investment in 30-year bonds issued by Moore Corporation. The bonds have no special covenants.The Wall Street Journalreports 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%

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

ExpectedIP%

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

Fair interest rate%