Managing Individual Investor Portfolios. Question. first, determine, practice, expected

sameeragarwal

Solution to first practice problem on CFAI txtbook page 145. The 2nd point asks to determine the return requirement. It’s 7.4%, I get it, but then the explanation of the problem says “Because the portfolio’s expected return of 7.4% translates to a real return of approximately 4.4%, the portfolio is NOT expected to meet the return requirement of 4.5%”
Why 4.5% (50,000/1120000) is in real terms but 7.4% (82500/1120000) is in nominal terms?
I think CFAI txt is getting a lot of people confused about real vs nominal return requirements in Reading# 14 “Managing Individual Investor Portfolios”.