The correct answer is: A. expected over security life.
The quoted interest rate on a security is the rate of return that the issuer promises to pay the investor. This rate of return is typically higher than the risk-free rate of return, such as the yield on a Treasury bond, to compensate the investor for the risk of inflation. The inflation rate that is included in the quoted interest rate is the inflation rate that is expected to occur over the life of the security.
Option B is incorrect because the inflation rate that is expected at deferred call is not necessarily the same as the inflation rate that is expected over the life of the security. The inflation rate at deferred call is the inflation rate that is expected to occur at the time when the issuer has the option to call the security.
Option C is incorrect because the inflation rate at bond issuance is not necessarily the same as the inflation rate that is expected over the life of the security. The inflation rate at bond issuance is the inflation rate that was in effect when the bond was issued.
Option D is incorrect because the inflation rate that is expected at time of maturity is not necessarily the same as the inflation rate that is expected over the life of the security. The inflation rate at time of maturity is the inflation rate that is expected to occur when the bond matures.