CFA 2016 AM Q1-A: Why add Basic subscription's inflation to overall inflation?

CFA Level III Portfolio Management
#1

If the goal is to keep up with subscription’s inflation and maintain the purchasing power after payment of the one-time initiation fee, a 2% will be above the 1% of the subscription’s inflation.

Have you seen others cases last this? Should we always add the product’s (or source of cash outflows) inflation to the overall inflation?

#2

I got dinged on this one too. It’s because the cash outflow grows at 1% + Inflation which is 2% in this case. So the cash outflow (and if I recall correctly, the only expense) will make the port require a ROR to preserve real value of 3% (1 + 2) + the other stuff.

#3

Thanks. This one was tricky.