QUESTION 5 The three components of an interest rate are the base rate (the pure rate plus an inflation adjustment), the risk premium, and the premium the consumer must get to defer consumption. True False QUESTION 6 Bond price changes brought about by interest rate changes are smaller for bonds of long maturity than for bonds of short maturity. O True False QUESTION 7 2 points Saved 2 points Save Answer Liquidity risk refers to the chance that an investor will incur a loss because it's hard to sell the bond of a company that isn't well known. O True 2 points Save Answer False QUESTION 8 Federal government bonds have no risk premium because they carry no risk of any kind. True False QUESTION 9 2 points Save Answer The "base" interest rate is made up of the pure rate, an inflation adjustment, and a liquidity risk premium. O True 2 points Save Answer O False