A basic interest rate pricing model for an asset
Assuming perfect information, pe is the same for all participants in the market, and this is identical to:
in is the nominal interest rate on a given investment
ir is the risk-free return to capital
i*n = the nominal interest rate on a short-term risk-free liquid bond (such as U.S. Treasury Bills).
rp = a risk premium reflecting the length of the investment and the likelihood the borrower will default
lp = liquidity premium (reflecting the perceived difficulty of converting the asset into money and thus into goods).