Risk-Free


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Related to Risk-Free: Risk Free Asset

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.
References in periodicals archive ?
The Risk-Free Promise was designed to show these types of companies -- on the verge of selecting a better supplier -- that their products, service and pricing will be guaranteed.
And the recommendation to make costs payable by an unsuccessful defendant, but not by an unsuccessful claimant - in a bid to remove the need for expensive ATE premiums - would open the floodgates to further risk-free, speculative litigation.
situation, risk-free rates have been driven down during the last year.
Investors fled assets with any cred it risks and sought safety in risk-free sovereign debt, especially U.
Jackson says he has sometimes made a 25 per cent profit on a single risk-free bet by following such a strategy.
This risk-free treatment of expected labor earnings is quite different from legal or market evaluation of other productive assets which implicitly discount future expected earnings of productive assets by risk-adjusted rates.
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Both the current system and no-win, no-fee arrangements are so biased in favour of the claimants that they encourage people to make a claim effectively risk-free, the Adam Smith Institute (ASI) said.
The model assumes that stock prices will increase at the risk-free interest rate (B15) minus the expected dividend yield (B16), then plus or minus the price volatility (B12) assumed for the stock.
The Sharpe ratio measures the additional return per unit of risk, where the risk-free rate is typically a Treasury rate.