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Risk-Free

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Risk-Free
Describing a transaction or investment in which the return is known with certainty. The certainty generally comes from a supreme amount of confidence in the issuer of the investment; for example, Treasury securities are considered risk-free investments because the United States government is considered the best possible issuer. Critics contend that there is no such thing as a risk-free investment because, in theory, even the US government could default. However, risk-free investments have such a low level of risk that it may be ignored. Risk-free investments usually have a low rate of return and, as a result, are exposed to inflation risk.


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No teenage drinking was risk-free, the researchers said.
To reach the conclusion, Northwestern students were given real money to make a series of investments, in each trial deciding how to allocate money between a risky and a risk-free asset.
Banks value the business because it is risk-free and profitable, and it also gives them a chance to reach new customers.
 
 
 
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