In the Fisher equation, risk premiums are embedded in the expected inflation rate.

Name: In the Fisher equation, risk premiums are embedded in the expected inflation rate.
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The Fisher equation relates nominal interest rates to real interest rates and expected inflation, but it does not directly incorporate risk premiums. Risk premiums are additional returns demanded by investors for taking on risk, and they are considered separately from the expected inflation rate.

In the Fisher Equation, Risk Premiums Are Embedded in the Expected