Hedging strategy usually consists of a portfolio based on both the underlying and riskless assets
Excess reserves are not required by law and offer attractive benefits that other short-term riskless assets
By contrast, the Society of Actuaries Blue Ribbon Panel on Public Pension Funding, on which I served, recommended that in forecasting investment returns plans should use a "building blocks" approach, in which a risk premium is stacked atop the yield on riskless assets
London, Sept 14, 2012 - (ACN Newswire) - In these uncertain times private wealth management in Asia should revolve around safe haven, dollar based riskless assets
, says Christian Menegatti, Managing Director & Head of Global Economic Research, Roubini Global Economics, USA.
While the balance between risky and riskless assets
is critical for each investor, in order to illustrate the benefits of diversification, the first place to focus on is the risky portion of the portfolio.
However, this process makes no explicit reference to equilibrium in the market for riskless assets
To reduce deposit risk, banks substituted riskless assets
Similarly, provisions of the Federal Reserve Act enabled banks to convert illiquid assets, such as loans, into riskless assets
(deposits at the central bank) through the discount window and to complete payments using Federal Reserve credits.
It is shown that an unequal distribution of savings can lead to a rise in the proportion of risky to riskless assets
held by banks, increasing the chance of bank failure.
Equation (5[prime]) states that under risk neutrality, the price ratio of two riskless assets
predicts the rate of change in exchange rates when opportunities for arbitrage profit cease to exist.
The offsetting payoff profiles for a short position in risky assets or risky securities is: buy forwards or futures, increase long positions in assets, long a call plus short a put, or increase the ratio of risky assets to riskless assets
In the absence of a bequest motive, both financial wealth and the implicit riskless assets
(state pensions) are being depleted at similar rates.