Zero Risk

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Zero Risk

Describing an investment or security 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 zero risk investments because the United States government is considered the best possible issuer. Critics contend that there is no such thing as a zero risk investment because, in theory, even the US government could default. However, zero risk investments have such a low level of risk that it may be ignored. Zero risk investments usually have a low rate of return and, as a result, are exposed to inflation risk.
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References in periodicals archive ?
Or are they seriously expecting the Royal Navy (approximately 74 active ships) to enforce EU sanctions against Iran after we have left, while they accept the zero-risk strategy of non-involvement?
'This is a zero-risk formula following which can help the government get its economic goals and objectives.
Chris Iwarah, the Owerri-bound flight had to return to Lagos as a precautionary measure and in line with the airline's zero-risk policy.
"But in all other security system, we must realize as well that there's no such thing as zero-risk. There's always a risk.
However, the capital requirements of Italian insurers would probably experience the greatest increase if European authorities were to remove the zero-risk weighting for eurozone sovereign bonds under the S2 standard formula approach.
'Using the latest technology in simulation, whilst being guided by our faculty, makes for a more effective learning environment for students, by converting high-risk, high-reward scenarios into zero-risk, high-reward scenarios,' said Ibrahim Habib, a third-year medical student at AKU.
Trends is a compliant, flexible, and zero-risk data panel owned directly by Edison.
"By keeping the United States in Afghanistan, Obama has fallen prey to what psychologists call the 'zero-risk bias'.
The main factors supporting the FSR is the bank's solid capital adequacy ratio (benefiting from a significant proportion of zero-risk weighted local currency government securities), very high liquidity premised on customer deposit funding, good profitability metrics and strong business franchise.
This is in addition to the designation of the IDB as 'Zero-Risk Weighted' Multilateral Development Bank by the Basel Committee on Banking Supervision in 2004 and by the European Commission in 2007.
The rule, called the zero-risk weighting rule, was heavily criticised during the euro zone debt crisis.