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 market interest rate is really the sum of five factors: the risk free interest rate, the default risk premium, the inflation risk premium, the liquidity risk premium, and the interest rate risk premium.