There was a CFAi EOC question. As one of the steps leading up to the solution, I was required to calculated the T-Bill and 10 year rates. Among the information given was something similar to this: Real 1 year Rf Rate: 1.2% Current Inflation Rate: 2.2% Long-Term Infaltion Expectation: 2.6% Spread of 10 year over 1 year Treasury Note: 1% Now what is the nominal rate for a (this was a substep): 1 Year T-Bill: 10 Year Treasury: My key point here was that in my answer I had used the current inflation in calculating the nominal rate for the T-Bill but the LT Expectation for the 10 year. My reasoning that assuming a disparity between the two and no further information, the 1 year inflation would be closer to the current actuals as opposed to the long term expectation.