You are comparing a 10-year, 3% U.S. government zero coupon bond (which is priced to yield 4%) to a 10-year, 3% coupon bond issued by the Aerocar Motor Co. (which is priced to yield 5%). The difference between the two yields is due to:
I. maturity premium
II. default premium
III. liquidity premium
A) I only
B) II only
C) III only
D) II and III