Quantitative Problem:

An analyst evaluating securities has obtained the following information. The real rate of interest is $2\mathrm{.}5\%$ and is expected to remain constant for the next $5$ years. Inflation is expected to be $2\%$ next year, $3\%$ the following year, $4\%$ the third year, and $5\%$ every year thereafter. The maturity risk premium is estimated to be $0\mathrm{.}1(t-1)\%,$ where $t=$ number of years to maturity. The liquidity premium on relevant $5-$year les is $0\mathrm{.}5\%$ and the default risk premium on relevant $5-$year securities is $1\%.$

a$.$ What is the yield on a $1-$year T$-$bill? Do not round intermediate calculations. Round your answer to two decimal places.

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b$.$ What is the yield on a $5-$year T$-$bond? Do not round intermediate calculations. Round your answer to two decimal places.

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c$.$ What is the yield on a $5-$year corporate bond? Do not round intermediate calculations. Round your answer to two decimal places.

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