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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
EU policymakers, with an eye on common market law, extended those rules to allow banks to treat as risk free any sovereign bonds issued by other EU countries.
Resultantly, a risk free environment can be ensured for our coming generation.
If we assume a beta of 1 for its assets in place, a risk free rate of 2 percent, and an expected rate of return of 12 percent, then the cost of equity equals:
In one of the more egregious examples of this double counting, Glassman and Hassett (2000) assumed that equity was close to risk free in the long term and discounted earnings as cash flows, while counting on long term earnings growth set equal to nominal GDP growth, to arrive at the conclusion that the Dow Jones should be trading at three times its then prevailing level.
Gold, real estate and art, the traditional havens for emerging market investors in tough times, especially during periods of high inflation, have not proven risk free. Investors who plowed into gold, seeking refuge from uncertainty surrounding the Iraq war, watched in horror as prices zoomed to more than $380 per ounce during January 2003, from $325, only to collapse back to $325 by the start of April.
He had a solid chance here on Risk Free in the seller but, after travelling well in the lead, the gelding was worried out of it close home by Blakeset, trained by David Barron and ridden by Neil Callan.
Even the first four years of HRT use may not be risk free. In the WHI study, there was an increase in the diagnosis of breast cancer after four years.
In a preface, presumably written after September 11, Kerrey explains that he wanted to tell his story "because of the powerful needs that oppose remembering the bad with the good when we Americans rev up our patriotic engines." At a time when many liberals (neo- and otherwise) have been seduced by the notion of a preventative war against Iraq, it is worth recalling that sending young soldiers into combat is not always as risk free as the Gulf War or Afghanistan.
The private banks that lent billions in unwise speculative loans to Asian countries prior to the collapse were operating risk free. The IMF and World Bank loaned the crisis-stricken countries huge amounts of money (generated from the taxes of the rich countries) at very high interest rates, insisting private bank repayment be their first priority.
Although side effects of CSFs so far include nothing more than mild bone pain and headaches that respond to over-the-counter analgesics, the compounds are not risk free. "The initial euphoria associated with these clinical successes needs to be tempered with concern for ...

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