Riskless rate


 

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Riskless rate

The rate earned on a riskless investment, typically the rate earned on the 90-day US Treasury Bill.



Riskless rate

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Riskless transaction

Riskless transaction

A transaction that is guaranteed a profit, such as the arbitrage of a temporary differential between commodity prices in two different markets. The evaluation of whether dealer markups and markdowns in OTC transactions are reasonable. According to NASD, markups or markdowns should not exceed 5%.


Riskless arbitrage

Riskless arbitrage

The simultaneous purchase and sale of the same asset to yield a profit.


Riskless rate of return

Riskless rate of return

The rate earned on a riskless asset.


Riskless principle

Riskless principle

A term used by the London Stock Exchange to denote either: that a trade was reported as a riskless principle transaction between two non-members, where the two transactions are executed at different prices or on different terms (requiring two separate trade reports)orthat a market maker is reporting a riskless principle transaction where the two transactions are executed at different prices.


Riskless or risk free asset

Riskless or risk free asset

An asset whose future return is known today with certainty. The risk-free asset is commonly defined as short-term obligations of the US government.




 
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