Answer:
Maturity risk premium 3.50%
Step-by-step explanation:
Yield rate = 9%
Risk free risk = 3.25%
Inflation rate = 2.25%
Formula for yield rate:
Yield rate = Risk free risk + Inflation rate + Maturity risk premium
r= rfr+ir+Mrp
9.00% = 3.25% + 2.25% + Mrp
0.09 = 0.0325 + 0.0225 + Mrp
0.09 = 0.055 + Mrp
Mrp = 0.09 - 0.055
Mrp = 0.035
Mrp = 3.5%
So the Maturity risk premium is 3.5%