5-8 Real versus nominal rates k* Real risk-free rate T-bond rate if no inflation 1%to4% k Any nominal rate kre Rate on Treasury securities Copy right C 2002 by Harcourt, Inc. All rights reserved5 - 8 Copyright © 2002 by Harcourt, Inc. All rights reserved. Real versus Nominal Rates k* = Real risk-free rate. T-bond rate if no inflation; 1% to 4%. = Any nominal rate. = Rate on Treasury securities. k kRF