riskless investment

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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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Online store owners always look for a risk free investment when it comes to incorporating web to print technology as they do not want to spend a lot on having a web to print store and regret later.
The report said that the banks have not pursued housing finance due to lack of implementation of foreclosure law, titling issues and availability of risk free investment. Another reason hindering housing finance is banks' reluctance to lend outside few big cities, said the report.
"This is due to the fact that the EGP (Egyptian Pound) was being devalued against USD and there was little risk free investment to consider.
As evident bulk of the deposits was used for investment in government securities offering risk free investment as against advances.
U will assist farmers in setting up ostrich farms by providing complete training, technical assistance, consultancy and medication to ensure a safe and risk free investment.
In the meeting, it was decided that PMAS-AAUR in collaboration with POC would help the farmers in setting up ostrich farm and would provide complete training, technical assistance, consultancy, medication to ensure safe and risk free investment in ostrich farming.
Because a completely risk free investment would be one which would repay at a future date, an amount equivalent in purchasing power to that represented by the amount originally invested.
Of course the investor can't expect a risk free investment, but the more the plan demonstrates that management can handle the risks present in the business and marketplace, the more successful it will become.
Now we have complaints in the press that the money does not reach those who need it, with the largest farms still receiving the greatest payments ( the Commission has been trying for some time, without success, to deal with that by introducing a cap (the Commissioner has promised to try again as part of the health check) ( and complaints that speculators are buying entitlements to single payments, registering themselves as occupiers of unproductive scrub land and looking forward to a better return on their risk free investment than the financial markets can deliver.
To arrive at a comparison between costs and revenues it will suffice to compare an investment in one notional high demand item against a risk free investment returning 8% per annum.
The most important point for them to understand is that there really is no such thing as a "risk free investment." In planning an investment portfolio, investors do not have a choice of "risky" versus "risk-free" investments.
Banks are expected to maintain their preference for risk free investment in government securities while shying away from risky advances to customers.

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