The correct answer is: B. expected in future.
The inflation rate included in a bond’s interest rate is the inflation rate that is expected to occur in the future. This is because the bond issuer is essentially lending money to the bondholder, and they want to be compensated for the risk of inflation. The higher the expected inflation rate, the higher the interest rate that the bond issuer will charge.
Option A is incorrect because the inflation rate at bond issuance is not necessarily the same as the inflation rate that will occur in the future. The inflation rate can change over time, so the bond issuer needs to take this into account when setting the interest rate.
Option C is incorrect because the inflation rate expected at time of maturity is also not necessarily the same as the inflation rate that will occur in the future. The inflation rate can change over time, so the bond issuer needs to take this into account when setting the interest rate.
Option D is incorrect because the inflation rate expected at deferred call is also not necessarily the same as the inflation rate that will occur in the future. The inflation rate can change over time, so the bond issuer needs to take this into account when setting the interest rate.