If he were that kind of hands-on manager, this mess might not have happened in the first place.
The real risk-free rate is 4%. 1. The real risk-free rate is 4%. Inflation is expected to be 3% this year and 5% during the next 2 years. Assume that the maturity risk premium is zero.
The nominal interest rate was 4 percent, but the real interest rate is approximately 1 percent. If the inflation rate turns out to be greater than 4 percent, the real rate of interest will be negative and you won't have enough for tuition.