Attempts Score / 1 22. Chapter MC, Section .06, Problem 070.Algo Kern Corporation's 5-year bonds yield 9.15% and 5-year T-bonds yield 5.75%. The real risk-free rate is r* = 3.50%, the default risk premium for Kern's bonds is DRP = 2.10% versus zero for T-bonds, the liquidity premium on Kern's bonds is LP = 1.30%, and the maturity risk premium for all bonds is found with the formula MRP = (t - 1) x 0.1%, where t = number of years to maturity. What is the inflation premium (IP) on all 5-year bonds?

Kern Corporation's 5 -year bonds yield 9.15% and 5 -year T-bonds yield 5.75%. The real risk-free rate is r=3.50%, the default risk premium for Kern's bonds is DRP =2.10% versus zero for T-bonds, the liquidity premium on Kern's bonds is LP =1.30%, and the maturity risk premium for all bonds is found with the formula MRP =(t1)0.1%, where t= number of years to maturity. What is the inflation premium (IP) on all 5 -year bonds