Question: Please correct if I'm wrong and finish the rest. Appreciated 9. Determinants of market interest rates Aa Aa E Some characteristics of the determinants of

 Please correct if I'm wrong and finish the rest. Appreciated 9.

Please correct if I'm wrong and finish the rest. Appreciated

9. Determinants of market interest rates Aa Aa E 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 R eal risk-free rate Symbol [ p* L Real risk-free rate Liquidity risk premium JI N LP Characteristic This is the rate on short-term Government of Canada securities, assuming there is no inflation. It is calculated by adding the inflation premium to r*. This premium is added when a security lacks marketability, because it cannot be bought and sold quickly without losing value. This is the premium that reflects the risk associated with changes in interest rates for a long-term security. This is the premium added to the real risk-free rate to compensate for a decrease in purchasing power over time. This is the premium added as a compensation for the risk that an investor will not get paid in full. D

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