Characteristic

Component

This is the rate for a short$-$term riskiess securty when infabion is expected to be aera. $$

This is the rate on a Treasury bill or a tienasury bond.

This is the premium added to the real risk$-$free rate to compensate for a decrease in

$$

$=$ess Tips

purchaving power over time.

This is the premium adoed as a compensation for the rik that an investor will not get paid $$

ess Tips in full.

This is the premium that refiects the risk associues meth claspes in interest rates for a $$ long$-$term security.