The gergen group's 5-year bonds yield 6.85, and 5-year t-bonds yield 4.75. the real risk-free rate is r* = 2.80, the default risk premium for gergen's bonds is drp = 0.85 versus zero for t-bonds, the liquidity premium on gergen's bonds is lp = 1.25, and the maturity risk premium for all bonds is found with the formula mrp = (t - 1) × 0.1, where t = number of years to maturity. what is the inflation premium (ip) on 5-year bonds?
A) 1.40
B) 1.55
C) 1.71
D) 1.88