The Gergen Group's 5-year bonds yield 6.50%, and 5-year T-bonds yield 4.10%. The real risk-free rate...

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The Gergen Group's 5-year bonds yield 6.50%, and 5-year T-bonds yield 4.10%. The real risk-free rate is r* = 2.20%, the default risk premium for Gergen's bonds is DRP = 1.15% versus zero for T-bonds, the liquidity premium on Gergen's bonds is LP = 1.25%, and the maturity risk premium for all bonds is found with the formula MRP = (t 1) 0.1%, where t = number of years to maturity. What is the inflation premium (IP) on 5-year bonds? a. 1.50% b. 2.55% O c. 1.15% d. 1.47% e. 2.40% The Gergen Group's 5-year bonds yield 6.50%, and 5-year T-bonds yield 4.10%. The real risk-free rate is r* = 2.20%, the default risk premium for Gergen's bonds is DRP = 1.15% versus zero for T-bonds, the liquidity premium on Gergen's bonds is LP = 1.25%, and the maturity risk premium for all bonds is found with the formula MRP = (t 1) 0.1%, where t = number of years to maturity. What is the inflation premium (IP) on 5-year bonds? a. 1.50% b. 2.55% O c. 1.15% d. 1.47% e. 2.40%