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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: Characteristi

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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: Characteristi Component 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. Over the past several years, Germany, Japan, and Switzerland have had lower interest rates than Canada due to lower values of this premium. This is the difference between the interest rate on a government bond and a corporate bond of the same profile- that is, the same maturity and marketability This premium is added when a security lacks marketability because it cannot be bought and sold quickly without losing value This is the rate for a riskless security that is exposed to changes in inflation 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 Liquidity risk premium Nominal risk-free rate Maturity risk premium Real risk-free rate Inflation premium

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