Sign up  |  Log in

Nominal vs real cash flows.

Can you help answer the following:

1.  Is this statement incorrect : if your property is generating nominal cash flows, your discount rate will include an inflation component?

2. Nominal cash flows include inflation and do nominal discount rates?

3. Real rates exclude inflation as do real cash flows?

With exam day right around the corner, Schweser's Final Review products are designed to help you finish out your study plan and walk into the testing center feeling prepared and confident.

Nominal cash flows should be discounted at a nominal rate (that includes inflation).

Real cash flows should be discounted at a real rate (that excludes inflation).

Simplify the complicated side; don't complify the simplicated side.

Financial Exam Help 123: The place to get help for the CFA® exams