Problem 6-13 Default Risk Premium The real risk-free rate, r, is 2.9%. Inflation is expected to average 2.45% a year for the next 4 years, after which time inflation is expected to average 3.05 % a year. Assume that there is no maturity risk premium. An 8-year corporate bond has a yield of 10.95 %, which includes a liquidity premium of 0.25 %. What is its default risk premium? Round your answer to two decimal places A 5-year Treasury bond has a 3.9% yield. A 10-year Treasury bond yieldss 6.85%, and a 10-year corporate bond yields 8.1 %. The market expects that inflation will average 3% over the next 10 years (IP10 3%). 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 above. What is the yield on this 5-year corporate bond? Round your answer to two decimal places. %