Risk-free asset

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Investment management - risk appetite - flight to quality - rates of return - risk-free rate of return - risk assets.

For practical investment management and portfolio management purposes, a risk-free asset is considered to be one on which the expected rate of investment return is so likely to be achieved, that it can be treated as near-enough risk free for the purpose.

The usual example is short-dated debt obligations of a low-risk domestic central government.

For example in the United States, short-dated obligations of the US Treasury.

In this context, all assets that are not risk-free assets, are classed as risk assets.

The exact boundary between risk assets and risk-free assets can vary, depending on the purpose of the classification.

See also