Which of the Following Comprise the Nominal Interest Rate on Default-Free

Which of the following comprise the nominal interest rate on default-free securities according to the modern view of the term structure of interest rates?
I. liquidity premium
II. real rate
III. interest rate risk premium
IV. inflation premium

A) I and II only
B) II and III only
C) III and IV only
D) II, III, and IV only
E) I, II, III, and IV

Correct Answer:

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