The interest rate on a 20-year Treasury bond is 9.25 percent. A comparable maturity, Aaa-rated corporate bond is yielding 10 percent. Another comparable maturity, but lower-quality corporate bond has a yield of 14 percent, which includes a liquidity premium of 1.5 percent.

a. Determine the default risk premium on the Aaa-rated bond.

b. Determine the default risk premium on the lower-quality corporate bond.