Implies premium for inflation

CFA Level II Portfolio Management
#1

How to solve this ?

Blake informs Carlisle that he would like some short-term bonds in his portfolio. Carlisle proposes purchasing a one-year domestic government zero-coupon bond. It has a face value of $100 and is currently priced at $96.37. Carlisle estimates the one-year real risk-free rate at 1.15% and expects inflation over the next year to be 2.25%.

Q. The implied premium for inflation uncertainty for the one-year government zero-coupon bond proposed by Carlisle is closest to:

#2

Calculate the return the bind is offering given its price,

Subtract real risk free and inflation expecations what remains in premum for inflation uncertainity.

You can do the maths via staihjt subtrcation but better to use geometric linking

(100 / 96.27) = (1.015)x(1.0225)x(1 + p)

where p is the infllation uncertainity premium,