Assume you observe a 10-year bond with nominal rate of 8.0%….

Assume you observe a 10-year bond with nominal rate of 8.0%.   Further assume that for this 10-year bond the inflation premium is 2.25%, the liquidity risk premium is 0.25%, the maturity risk premium is 1.00%, and there are no special provisions on the bond that warrant a premium.   If you assume the real, risk-free rate is 3.00%, what is the default risk premium for this bond?