What is the lowest common ground for the pricing of a debt instrument? Currently we utilize the formula Risk Free Rate + Expected Inflation + Default Risk Premium + Liquidity Premium + Maturity Premium = the Interest Rate you pay. In this format we all must FORCAST what inflation is GOING to be during the life/holding period of the instrument in question. The modeling of what the inflation adjusted rate will be on any given future day is a ‘Monte Carlo’ study of immense di