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.

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 ?
The main focus of the company is teaching about risk-free investments even with no cash, credit or experience.
For much of this year, many advisors, market strategists and money managers have been complaining that the Fed's zero rate policy is hurting retirees and other savers who rely on risk-free investments or savings.
The Risks: Although generally thought of as risk-free investments, each fixed-income asset has its own unique risks.
2 percent, the best that can be said about these so-called risk-free investments is that they are not going down in value on an absolute basis.
When you talk about risk-free investments, most people will think of putting money into a bank or building society.
government obligations as the benchmark for risk-free investments, and we presume it still does.
Instead, accept the fact that risk-free investments are benchmarked off short-term U.
In the short run, lure of risk-free investments in government paper, coupled with high NPLs, has reduced eagerness of banks for extending private sector credit, it added.
The SEC alleges that Perez boasted a successful track record of providing risk-free investments in order to befriend new investors through word-of-mouth from previous investors.
We make two main theoretical contributions: First, we revisit the traditional capital allocation procedure, which delivers values of the optimal risky and risk-free investments without accounting for the intrinsic quantification of financial risk borne by investors.
If you can't afford to keep your money tied up, you should stick with risk-free investments.
8%--barely outpacing the 5% or better yields of virtually risk-free investments such as 10-year U.