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.
Interest rate risk is the risk that changes in interest rates may reduce (or increase) the market price of a security. For investors who own a bond or note until its maturity, interest rate risk is not a concern.