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The nominal, risk-free interest rate () can be determined by... a. adding the r-star (r*)...

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Finance

The nominal, risk-free interest rate () can be determined by...

a. adding the r-star (r*) rate to the liquidity premium (LP).

b. adding the inflation premium (IP) to the liquidity premium (LP).

c. adding the inflation premium (IP) to the r-star (r*) rate.

d. subtracting the default risk premium (DRP) from the r-star rate (r*).

e. adding the maturity risk premium to the inflation premium.

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