riskless investment

(redirected from Zero-Risk Investment)

Riskless Investment

An investment where 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 riskless investments because the United States government is considered the best possible issuer. Critics contend that there is no such thing as a riskless investment because, in theory, even the US government could default. However, riskless investments have such a low level of risk that it may be ignored. Riskless investments usually have a low rate of return and, as a result, are exposed to inflation risk.

riskless investment

An investment with a certain rate of return and no chance of default. Although various investments (for example, savings accounts and certificates of deposit at insured institutions) meet these requirements, a Treasury bill is the most common example of a riskless investment.
References in periodicals archive ?
Its huge shift during the last seven years from business and industrial loaning to zero-risk investment in government papers has divorced it from its core function of judiciously apportioning credit to promote sustained economic growth.
widows and pensioners and people who need periodical income flow through zero-risk investment mode.
One has to say it's not a zero-risk investment, but it's a low-risk investment,'' said George Johnston, director for public sector credit research at Barclays Capital in London.