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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

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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 Characteristic This is the premium added as a compensation for the risk that an investor will not get paid In full. This is the premium that reflects the risk associated with changes in interest rates for a long-term security It is calculated by adding the inflation premium to r. It is based on the bond'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 premium added to the real risk-free rate to compensate for a decrease in purchasing power over time. 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

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