The key components of a market interest rate are the risk-free rate and the credit risk premium. During the credit crisis, these two components changes substantially, but in different ways. The changes in these components illustrated how the Federal Reserve can intervene in the financial markets to improve financial conditions, but also how its potential favorable effect may be limited (at least in the first few months of a crisis). Write a short essay to explain how the risk-free rate and the risk premium changed as the credit crisis occurred. Explain why the financial markets can become paralyzed during a crisis? Is it because of changes in the risk-free rate or changes in the risk premium?