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Basic Question 4 of 5

If other factors are equal, a decrease in the expected rate of inflation will most likely result in a decrease in ______.

A. the real risk-free rate
B. the nominal risk-free rate
C. both real and nominal risk-free rates
Check Answer Previous Q Next Q Print

User Contributed Comments 6

User Comment
Stacerz02 Makes sense
wsiyer yes!
thebkr777 Nominal = Real rfr + expected r
ashish100 coolio
ashish100 Wait no

Nominal rfr = real rfr + expected inflation boiiii lets get it
zeanww Let's goooo
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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz

Tamara Schultz

Learning Outcome Statements

interpret interest rates as required rates of return, discount rates, or opportunity costs and explain an interest rate as the sum of a real risk-free rate and premiums that compensate investors for bearing distinct types of risk

CFA® 2025 Level I Curriculum, Volume 1, Module 1.