Problem $6\mathrm{.}13($Default Risk Premium$)$

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The real risk$-$free rate, $r^{**},$ is $1\mathrm{.}4\%.$ Inflation is expected to average $1\mathrm{.}1\%$ a year for the next $4$ years, after which time inflation is expected to average $3\mathrm{.}5\%$ a year. Assume that there is no maturity risk premium. A $10-$year corporate bond has a yield of $11\mathrm{.}5\%,$ which includes a liquidity premium of $0\mathrm{.}6\%.$ What is its default risk premium? Do not round intermediate calculations. Round your answer to two decimal places.

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