Aa Aa E. 7. Determinants of market interest rates Some characteristics of the determinants of nomina nterest rates are listed as follows. Identify the components (determinants) and the symbols associated with each characteristic: Characteristic Component 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 difference between the interest rate on a U.S Treasury bond and a corporate bond of the same profile-that is, the same maturity and marketability As interest rates rise, bond prices fa and as interest rates fall, bond prices rise. Because interest rate changes are uncertain, this premium is added as a compensation for this uncertainty. This is the rate for a riskless security that is exposed to changes in inflation. It is based on the bond's marketability and trading frequency; the less frequently the security is traded, the higher the premium added, thus increasing the interest rate. 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