This is the rate on short$-$term US Treasury securities$,$ assuming there is no inflation.

This is the premium added as a compensation for the risk that an investor will not get paid

in full.

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.

This is the premium added to the equilibrium interest rate on a security that cannot be

bought or sold quickly enough to prevent or minimize loss.

It is calculated by adding the inflation premium to $r^{**}.$

This is the premium added to the risk$-$free rate that reflects the average sustained

increase in the general level of prices for goods and services expected over the security$\text{'}$s

entire life.