An analyst evaluating securities has obtained the following information. The real rate of interest is 2% and is expected to remain constant for the next 3 years. Inflation is expected to be 3% next…

An analyst evaluating securities has obtained the following information. The real rate of interest is 2% and is expected to remain constant for the next 3 years. Inflation is expected to be 3% next year, 3.5% the following year, and 4.5% the third year. The maturity risk premium is estimated to be 0.40 percent. The liquidity premium on relevant 3-year securities is 0.30% and the default risk premium on relevant 3-year securities is 0.60%. a. Calculate average inflation rate for 3 years period. b. What is the yield on a 1-year T-bill? c. What is the yield on a 3-year corporate bond?