Risk rate is 2%, expected inflation rate is 3%, what is the nominal interest rate?

To calculate the nominal interest rate, you need to add the expected inflation rate to the risk-free rate. In this case, the risk-free rate is given as 2% and the expected inflation rate is given as 3%.

The nominal interest rate can be obtained by summing up these two rates. Mathematically, you can calculate it as follows:

Nominal Interest Rate = Risk-Free Rate + Expected Inflation Rate

Nominal Interest Rate = 2% + 3%

Nominal Interest Rate = 5%

Therefore, the nominal interest rate in this scenario is 5%.