Question: This is the rate for a short - term riskless security when inflation is expected to be zero. This is the rate for a riskless
This is the rate for a shortterm riskless security when inflation is expected to be zero.This is the rate for a riskless security that is exposed to changes in inflation.This is the premium added to a real rate of interest to determine a nominal interest rate.This is the difference between the interest rate on a US Treasury bond and a corporate bond with 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.As interest rates rise over time, bond prices fall, and as interest rates fall, bond prices rise. Because interest rate changes are uncertain over the life of the security, this premium is added as a compensation for this uncertainty.
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