Question: Please answer and show work for part A and part B regarding risk premium: A) A Treasury bond that matures in 10 years has a

Please answer and show work for part A and part B regarding risk premium:

A) A Treasury bond that matures in 10 years has a yield of 4.75%. A 10-year corporate bond has a yield of 9.50%. Assume that the liquidity premium on the corporate bond is 0.70%. What is the default risk premium on the corporate bond? Round your answer to two decimal places.

B) The real risk-free rate is 2.5% and inflation is expected to be 2.75% for the next 2 years. A 2-year Treasury security yields 6.85%. What is the maturity risk premium for the 2-year security? Round your answer to one decimal place.

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