Question: Georgia Builders' 5 - year bonds yield 7 . 5 0 % and 5 - year T - bonds yiel real risk - free rate

Georgia Builders' 5-year bonds yield 7.50% and 5-year T-bonds yiel real risk-free rate is r**=2.5%, the default risk premium for Kelly's bond .40%, the liquidity premium on Georgia Builders' bonds is LP =1.1% ve -bonds, and the inflation premium (IP) is 1.5%. What is the maturity ris MRP) on all 5-year bonds?
a.2.42%
b.2.00%
c.2.12%
d.1.84%
e.2.06%
Georgia Builders' 5 - year bonds yield 7 . 5 0 %

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