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2. Determinants of market interest rates Some characteristics of the determinants of nominal interest rates are listed as follows. Identify the components (determinants) and the symbols associated with each characteristic: Component Symbol Default risk premium Characteristic This is the rate for a short-term riskless security when inflation is expected to be zero. This is the rate on a Treasury bill or a Treasury bond. 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 It is based on the bond's rating: the Ngher the rating, the lower the premium added, thus lowering the interest rate. This premium is added when a security lacks marketability, because it cannot be bought and sold quickly without losing value This is the premium that reflects the risk associated with changes in interest rates for a long-term security Inflation premium Liquidity risk premium Maturity risk premium Nominal risk free rate Real risk-free rate Gracle i Now Save & Continue Continue without saving 2. Determinants of market interest rates Some characteristics of the determinants of nominal interest rates are listed as follows. Identify the components (determinants) and the symbols associated with each characteristic: Component Symbol DRP Characteristic This is the rate for a short-term riskless security when inflation is expected to be zero. This is the rate on a Treasury bill or a Treasury bond. 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 It is based on the bond's rating; the higher the rating, the lower the premium added, thus lowering the interest rate. This premium is added when a security lacks marketability, because it cannot be bought and sold quickly without losing value. This is the premium that reflects the risk associated with changes in interest rates for a long-term security