Why is the expected rate of inflation ( P e ) used in finding the nominal

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Why is the expected rate of inflation ( Δ P e ) used in finding the nominal rate of interest in Equation 2.1 rather than the actual rate of inflation ( Δ P a ), which can be easily measured?

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Fundamentals Of Corporate Finance

ISBN: 9781119795438

5th Edition

Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates

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Question Posted: Aug 30, 2024 09:00 AM

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Why is the expected rate of inflation ( P e ) used in finding the nominal

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Fundamentals Of Corporate Finance

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