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Nominal Interest Rate on a security

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"What are the six factors that determine the nominal interest rate on a security?" (Cornett, Adair, and Nofsinger, 2012, p. 200). Define each factor.

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This solutions lists and explains the factors that determine the nominal interest rate on a security.

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Six factors that determine the nominal interest rate on a security are real risk-free rate, default risk, maturity risk, liquidity risk, premium for expected inflation, and quoted rate on a risk-free security. Real risk-free rate is the rate that would exist on a riskless security in a world with no ...

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