Question 60 morning CFAI mock through, example, morning, solution, directly

anshultongia

The answer shows rho= r - I, I am confused here as to whether subtract I from r or use r directly in the formula of P/E flow through rate.....as even the example in CFA ethics book do not use r-I and use r directly without subtracting I (Inflation)...but the solution to the mock subtracts I to get rho......can anyone help as to which is the right method ??