The difference between the nominal risk-free rate and the real risk-free rate is that the real risk-free includes inflation and the nominal risk-free rate does not include inflation.

Question

Quizplus · Accepted Answer

The nominal risk-free rate includes inflation expectations, whereas the real risk-free rate is adjusted to remove the effects of inflation, representing the true cost of borrowing without the influence of inflation.

The Difference Between the Nominal Risk-Free Rate and the Real