Real risk free r*

Inflation premium IP

Maturity risk pemium MRP

Liquidity premium LP

Aa Ma Aa Md me characteristics of the determinants of nominal interest rates are listed as follows. Identify the components eterminants) and the symbols associated with each characteristic: Component Symbol Characteristic | 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 It is calculated by adding the inflation premium to r* 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 premium is added when a security lacks marketability, because it cannot be bought and sold quickly without losing value. 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 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 Flash Player WIN 28,0,0.137 QJ J,JA 12004, 2016 , Ali ri s reserved