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Default Risk Premium
The additional yield that a borrower must pay to compensate the lender for the risk that the borrower may default on the loan.
Pure Rate
The real rate of interest that would exist in the market in the absence of inflation, default risk, and other factors that could affect nominal rates.
Pure Rate
The theoretical rate of return of an investment with no risk of financial loss, often considered as the base rate for determining risk-adjusted returns.
Inflation
The speed at which the average cost of goods and services increases, leading to a decrease in buying power.
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