A 2-year Treasury bond has a 4.00% yield. A 5-year Treasury bond yields 6.00%, and a 5-year corporate bond yields 36.40%. The market expects that inflation will average 3.0% over the next 5 years. Assume that MRP = [0.10 x (t-1)]%, where t is the number of years to maturity. Also assume that the annual real risk-free rate will remain constant over the next 5 years. A 2-year corporate bond has the same default risk premium and liquidity premium as the 5-year corporate bond described. What is the yield on this 2-year corporate bond? 34.30% 34.50% 4.00% 34.40% Assume that the expected inflation rate for Year 1 is 10%; for Year 2 is 9%; for Year 3 is 8%; and for Year 4 and thereafter is 2%. Assuming a real risk-free rate of 2.0% and a maturity risk premium that equals [0.1 x (t)]%, where t is the number of years to maturity, estimate the interest rate for a 10- Year Treasury security 5.00% 6.10% D 2.00% 07.10%