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 CBE noted that similar standard limits for risk-free interest rates are being developed and started to be used as alternatives as well as to major currencies in other capital markets without any change in the monetary policy framework.
The CML represents the possible combinations of the market portfolio and the risk-free asset.
First and foremost, the working group has a mandate to identify and develop an adoption plan for a risk-free overnight rate that can serve as a basis for an alternative to the benchmarks currently used in the euro area.
(3) A risk-averse individual with an average life expectancy would choose a risk-free investment and thus not purchase an annuity at all.
The difference between expected rate of return on equity and risk-free rate is the (equity) risk premium.
And SNP MSP Watt said: "Smoking cessation services are exploring how they can best support users of e-cigarettes to quit tobacco for good but the products are not risk-free."
Yet, Sentana (2001) and Sentana (2003) assume that a mean variance investor chooses among the permissible and possible portfolios within that VaR constraint and the possibilities afforded by the efficient frontier and risk-free borrowing and lending.
"Thanks to the innovative risk-free business model, Balfour Beatty Communities plans to begin a pilot program at our family housing community at Fort Leonard Wood in Missouri.
However, and I bring up this complicated issue with trepidation, it does seem possible that in a world with both lower growth and a lower risk-free rate that the risk premium might also drop a little.
He said the Qatar National Vision 2030 aimed at establishing a risk-free financial system in the country.
The need to own risk-free assets, in our view, has converted the concept of "risk-free" to "at-risk" assets.