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.
Investors currently use the interest rate on the 3-month U.S. Treasury bill or Germany's 3-month bond. There is no such thing a true risk-free investment, however. A tiny chance exists that these countries could default on their debt or that interest rates could skyrocket during this short period.