Chartered Financial Analyst Level 1

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Answer: nominal risk-free rates because they contain an inflation premium.

T-bills are government issued securities and are therefore considered to be default risk free. More precisely, they are nominal risk-free rates rather than real risk-free rates since they contain a premium for expected inflation. Real risk-free rates would exclude inflation expectations, while nominal rates include them.

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T-bill yields can be thought of as:

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Last updated: April 1, 2026 at 11:36

nominal risk-free rates because they contain an inflation premium.

nominal risk-free rates because they do not contain an inflation premium.

real risk-free rates because they contain an inflation premium.