Risk-Free

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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 ?
First, if a risk-averse manager cannot share the market risk in his compensation, then he will underinvest in projects with market risk (relative to the preferences of diversified investors) even if the cost of capital equals the riskless interest rate.
[6] In constructing this estimate, we start with 1977 (premanipulation) market values, subtract dividend payments and add public offerings, assuming that in the absence of manipulation that monthly bank returns would have been equal to the riskless rate of return plus 50% of the industrial shares' excess monthly return.
For this reason, the Ministry of Finance of Norway calculates the value of future tax deductions based on the presumption that firms value the deductions as a riskless revenue stream (Ministry of Finance, 2012; Jensen, 2017).
DOL PTE 86-128 may be read to cover riskless principal transactions, which are more in the nature of agency transactions.
As in the corporate bond pricing literature, we express the funding risk in terms of a discount rate for expected liabilities that involve a spread (henceforth denoted a funding spread) over the yield on a riskless government bond of appropriate maturity, which equals the duration of the pension liability in our case.
The price process of the riskless asset {[S.sub.0](t) | t [member of] [0, T]} is modeled by
Chamayou's most important contribution to the philosophy of war is life at both ends of killing demands a pause, an acceptance that combat is a most unfortunate option and to reject the idea of riskless war.
"So, the newborn MacCare we can touch today is not only able to keep your Mac in smooth, quick and riskless running, but also improve your iDevice performance by retrieving considerable disk space in one click."
Strictly speaking, zero rates are observed only for nominal, medium-term debt that is perceived to be riskless. But, throughout the eurozone, rates are close to zero -- and negative for a substantial share of government debt -- and are expected to remain low for quite some time.
5, 2013, Oriental had effected approximately 2,800 riskless principal transactions involving Puerto Rico closed-end funds (CEFs) in approximately 1,000 accounts and failed to disclose approximately $2.9 million in markups and markdowns on customer trade confirmations.
In any case, not naming names becomes a riskless endeavor...
This can enhance young people's sense of engagement and collectivity, as well as allow them to learn how to take (riskless) risks.