Calculate Risk Premium? (CFA Mock 2011 Spoiler)

Finally heard from them. Treasury bill return is nominal return. Answer for Q 117 is C. They said they will update the mock and errata.
 
anish Wrote:
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> Finally heard from them. Treasury bill return is
> nominal return. Answer for Q 117 is C. They said
> they will update the mock and errata.
Just to confirm, Nominal rate is without inflation right?
 
nominal interest rate or nominal rate of interest refers to the rate of interest before adjustment for inflation (in contrast with the real interest rate)
from the site you just posted.
Before adjusting for inflation… It includes the inflation %
N = Real + Inflation
Real is adjusted for inflation : R = N-Inflation
 
Thanks for clarifying! I think I understand the concept well and has been calculating right but somehow missed on wordings. I didn’t realize because I am calculating real off of nominal that means inflation component is included in that. Does that mean all interest rate and returns we see have inflation component in it right?
 
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