An average inflation rate which is expected over life of security is classified as

The correct answer is: A. inflation premium

An inflation premium is a component of the yield on a bond that compensates investors for the expected loss of purchasing power over the life of the bond. The inflation premium is determined by the expected rate of inflation, which is the rate at which prices are expected to rise in the future.

The other options are incorrect because:

• A off season premium is not a component of the yield on a bond.
• A nominal premium is the total yield on a bond, which includes both the real interest rate and the inflation premium.
• A required premium is the minimum yield that an investor is willing to accept on a bond, which is based on the risk of the bond and the expected return on other investments.