Hi everyone, I would like some help with this question. Please show the work. Thank you.

Use the following information to answer the question. * Return rate on TIP = 3%. * Inflation rate is expected to be 8% in year 1,5% in year 2, and 4% thereafter. * All T-bonds are highly liquid and free of default risk. * A a 2-year T-bond yields 11% and a 2-year Keys bond yields 12.5%. If the default risk premium for Keys' bonds is 0.50%, what is the liquidity premium on Keys' bonds? Select one: O a. 1.5% O b. 14.5% O c.0.5% O d. 3.5% e. 1.0%