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.
Definition. The optimum rate of return on an investment that can be achieved without incurring any risk whereby the investor is assured of receiving both original principal and a minimal return over a period of time. The rate of a U.S. Treasury security provides the comparative basis for determining a risk-free rate of return.