Excel Online Structured Activity: Interest rate premiums A 5-year Treasury bond has a 3% yd. A 10-year Treasury bond yields 6.35%, and a 10-year corporate bond yields 9.05%. The market expects that inflation will average 3.9% over the next 10 years (IP20 = 3.9%). Assume that there is no maturity risk premium (MRP - 0) and that the annual real risk-free rate, e, will remain constant over the next 10 years. (Hint: Remember that the default risk premium und the liquidity premium are zero for Treasury securities: DRP-UP = 0.) A 5-year corporate band 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 Mle 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. 1 2 Interest rate premiums 3.00% 3 5-year Treasury yield (T5) 4 10-year Treasury yield (T10) 6.35% 9.05% 3.90% 0.00% 0.00% 0.00% 5 10-year Corporate yield (C10) 6 Inflation Premium over 10 years (IP10) Maturity Risk Premium (MRP) 8 DRP Treasury 9 LP Treasury 10 DRPC5 + LPcs = DRPC10 + LPC10 11 12 Real risk-free rate, 13 14 Inflation premium over 5 years (IPs) 15 16 DRP 10 + LP 10 17 18 5-year Corporate yield (Cs) 19 Formulas #N/A #N/A #N/A #N/A