Component Symbol Characteristic This is the premium added to the real risk-free rate to compensate for a decrease in purchasing power over time. This is the premium that reflects the risk associated with changes in interest rates for a long-term security This is the rate for a short-term riskless security when inflation is expected to be zero This is the difference between the interest rate on a US Treasury bond and a corporate bond of the same profile-that is, the same maturity and marketability This is the premium added to the equilibrium interest rate on a security that cannot be bought or sold quickly enough to prevent or minimize loss. Tt is calculated by adding the inflation premium to ka