Final answer:
The compensation for risk is not included in the risk-free rate, which typically comprises compensation for delaying consumption and compensation for inflation.
Step-by-step explanation:
The compensation which is NOT included in the risk-free rate is compensation for risk. The risk-free rate is typically composed of three elements: compensation for delaying consumption, which is the return an investor requires to postpone spending until a future date; compensation for inflation, which adjusts for the anticipated rise in the overall level of prices; and a risk premium that accounts for the borrower's riskiness.
However, in defining a risk-free rate, the assumption is there is no risk, and hence no risk premium is included. Therefore, among the options provided, compensation for risk is the one that does not apply to the risk-free rate.