It is calculated by adding the inflation premium to r$*.$It is based on the bond$$s marketability and trading frequency; the less frequently the security is traded, the higher the premium added, thus increasing the interest rate.$$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.$$This is the premium that reflects the risk associated with changes in interest rates for a long$-$term security.$$This is the premium added as a compensation for the risk that an investor will not get paid in full.$$It changes over time, depending on the expected rate of return on productive assets exchanged among market participants and people$$s time preferences for consumption.