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 ?
The polarised political atmosphere created more uncertainty, which drove away participants to safe bets of risk-free investments.
The company aims to tap to those investors who generally are risk-averse and prefer largely risk-free investments in the shape of bank savings and deposits.
Although most brokerage houses tend to mention the politically charged atmosphere in the country simply as 'noise on the political front', so as to keep their foreign clients pacified, the local individual and institutional investors who see the extent of the acrimony between political rivals, have jettisoned shares and are running for cover in risk-free investments.
Next, values of the mean and the standard deviation in four periods were assessed, as well as values of the average monthly rates on risk-free investments (Table 2).
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.
It may be the return on risk-free investments, but the minimum required rate of return may also be equal to 0 (Elton et al., 2009).
10-year government bond yielding 2 percent and money funds paying out at most a far-more-paltry 0.2 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.
THERE is a popular misunderstanding that there is such a thing as a risk-free investment. 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.S.