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What is the nominal risk-free rate?
in Economics and Finance by Gold Status (10,247 points) | 10 views

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The sum of the real risk-free interest rate and the inflation premium is the nominal riskfree interest rate.

Many countries have governmental short-term debt whose interest rate can be considered to represent the nominal risk-free interest rate in that country. The interest rate on a 90 -day US Treasury bill (T-bill), for example, represents the nominal risk-free interest rate over that time horizon.  

US T-bills can be bought and sold in large quantities with minimal transaction costs and are backed by the full faith and credit of the US government.
by Gold Status (10,247 points)

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