Component Symbol Real risk-free rate Characteristic Over the past several years, Germany, Japan, and Switzerland have had lower Interest rates than the United States due to lower values of this premium. This is the rate on short-term US Treasury securities, assuming there is no inflation, This is the rate for a riskless security that is exposed to changes in inflation It is based on the band'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 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. As interest rates rise, bond prices fall, and as interest rates fall, bond prices rise. Because interest rate changes are uncertain, this premium is added as a compensation for this uncertainty Default risk premium Nominal risk-free rate Liquidity risk premium Maturity risk premium Inflation premium ced as follows. Identify the components (determinants) and the symbols Symbol Component lower interest TRF no inflation. LP tion. IP requently the terest rate. r* and a corporate MRP DRP rices rise. Because sation for this Grade It Now Save & Continue Continue without saving