Excel Online Structured Activity: Interest rate premiums = A 5-year Treasury bond has a 4.6% yield. A 10-year Treasury bond yields 6.1%, and a 10-year corporate bond yields 8.6%. The market expects that inflation will average 3.45% over the next 10 years (IP10 3.45%). Assume that there is no maturity risk premium (MRP = 0) and that the annual real risk-free rate, r*, will remain constant over the next 10 years. (Hint: Remember that the default risk premium and the liquidity premium are zero for Treasury securities: DRP = LP = 0.) A 5-year corporate bond has the same default risk premium and liquidity premium as the 10-year corporate bond described. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. = X Open spreadsheet What is the yield on this 5-year corporate bond? Round your answer to two decimal places. % A B B D E F G H I J Interest rate premiums NA 1 2 4.60% 3 5-year Treasury yield (T5) 4 10-year Treasury yield (T 10) 6.10% 8.60% ON 0009 3.45% 0.00% 0.00% 0.00% Formulas #N/A 5 10-year Corporate yield (C10) Inflation Premium over 10 years (IP 10) Maturity Risk Premium (MRP) DRP Treasury LP Treasury 10 DRPC5+ LPc5 = DRPC10 + LPC10 + 11 12 Real risk-free rate, r* 13 14 Inflation premium over 5 years (IP5) 15 16 DRP 10 + LP 10 17 18 5-year Corporate yield (C5) 19 20 21 #N/A #N/A #N/A