In the textbook,the nominal interest rate is defined as being equal to the real risk-free rate,plus an inflation premium,plus a default risk premium,plus a liquidity premium,plus a maturity risk premium.

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This is the correct definition of the nominal interest rate, as stated in various finance textbooks and financial literature. The nominal interest rate is the sum of the real risk-free rate (the rate of return an investor would earn on a riskless investment), an inflation premium (based on expected inflation), a default risk premium (reflecting the possibility of default by the borrower), a liquidity premium (compensating investors for the inability to sell the investment at the desired price or time), and a maturity risk premium (compensating investors for the risks associated with the length of the investment term).

In the Textbook,the Nominal Interest Rate Is Defined as Being