Excel Online Structured Activity: Interest rate premiums A 5-year Treasury bond has a 4.75% yield. A 10-year Treasury bond yields 6.7%, and a 10-year corporate bond yields 8.15%. The market expects that inflation will average 3.45% over the next 10 years (1P10 = 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. IH HHH Open spreadsheet What is the yield on this 5-year corporate bond? Round your answer to two decimal places B D E TE 4.75% 6.70% 8.15% A 1 Interest rate premium 2 3. S-year Treasury viek (T.) 10 year Treasury vield (T) 5 10 year Carporate yield (Clo) 6 Inflation Premium over 10 years (IP..) 7. Matunty Risk Premium (MRP) 8 DRP Treasury 19 LPTreasury 10 DRPC +LPG = DRPCIO+L PCHO 11 12 Real risk-frerate, r* 13 14 Inflation premium aver 5 years (IP) 15 16 DRPD +LPO 17 185-year Corporate yield (C.) 3.45% 0.00% 0.0094 0.00% Forroulas #NA IN #NA #NA #NA