3. Beterminants of market interest rates Aa Aa Some characteristics of the determinants of nominal interest rates are listed as follows. Identify the components (determinants) and the symbols associated with each characteristic: Characteristic Component Symbol It changes over time, depending on the expected rate of return on productive assets exchanged among market participants and people's time preferences for consumption This is the premium added to the risk-free rate that reflects the average sustained increase in the general level of prices for goods and services expected over the security's entire life. This is the rate for a riskless security that is exposed to changes in inflation. This premium is added when a security lacks marketability, because it cannot be bought and sold quickly without losing value This is the premium added as a compensation for the risk that an investor will not get paid in ful. This is the premium that reflects the risk associated with changes in interest rates for a long-term security Default risk premium Liquidity risk premium Inflation premium Nominal risk-free rate Real risk-free rate Maturity risk premium