risk-free return

Definition

A theoretical interest rate that would be returned on an investment which was completely free of risk. The 3-month Treasury Bill is a close approximation, since it is virtually risk-free.

Use risk-free return in a sentence

You should always be looking for anything that can give you a nice risk-free return if you can find it.

​ Was this Helpful? YES  NO 10 people found this helpful.

Individuals who are risk adverse are usually interested in risk-free return items. Treasury bills are therefore a good investment for them.

​ Was this Helpful? YES  NO 5 people found this helpful.

My boss asked me to shift all of our investments into government bonds because we needed a risk-free return while the stock market went down.

​ Was this Helpful? YES  NO 6 people found this helpful.

Show more usage examples...

Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
cap rate risk premium