Risk-Free Rate Of Return
Barron's Business Dictionary:
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Risk-Free Rate Of Return
The interest rate on the safest investments, such as federal government obligations.
| Risk-Financing Transfer, Risk-Financing Techniques, Risk-Control Techniques | |
| Risk-Return Trade-Off, Riskless Transaction, Ro-Ro-(Roll On-Roll Off) |
Barron's Real Estate Dictionary:
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Risk-Free Rate Of Return
The interest rate on the safest investments, such as short-term federal government obligations.
See buildup rate.
Example: U.S. Treasury bills.
See buildup rate.
Example: U.S. Treasury bills.
| Risk-Based Capital Requirement, Risk Vs. Reward | |
| Rollback, Rollover Home Sale |
Investopedia Financial Dictionary:
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Risk-Free Rate Of Return
The theoretical rate of return of an investment with zero risk. The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time.
Investopedia Says:
In theory, the risk-free rate is the minimum return an investor expects for any investment because he or she will not accept additional risk unless the potential rate of return is greater than the risk-free rate.
In practice, however, the risk-free rate does not exist because even the safest investments carry a very small amount of risk. Thus, the interest rate on a three-month U.S. Treasury bill is often used as the risk-free rate.
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Barron's Business Dictionary
Dictionary of Business Terms. Copyright © 2007 by Barron's Educational Series, Inc. All rights reserved.
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Barron's Real Estate Dictionary
Dictionary of Real Estate Terms. Copyright © 2008 by Barron's Educational Series, Inc. All rights reserved.
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