BNET Business Dictionary
Business Definition for: Risk-free Return
- the profit made from an investment that involves no risk
Additional Resources
- Risk and Return Perceptions of Institutional Investors
- This study examines the responses of a survey mailed to portfolio managers for large pension funds and insurers regarding their perceptions of the inherent risk and return of twenty investment choices. The purpose of the study is to determine whether large portfolio managers perceive the inherent risk of a specific...
- White papers 2003-01-01
- The Perception Of Time, Risk And Return During Periods Of Speculation
- This paper has derived the consequences of two hypotheses for the relationship between risk and return. The first hypothesis states that assets with the same risk must have the same expected return. From this, one derives the well-known invariance of the Sharpe ratio for uncorrelated stocks, as well as the...
- White papers 2002-01-10
- Commentary on "a review of research on the negative accounting relationship between risk and return: Bowman's paradox by M.N. Nickel and M.C. Rodriguez".
- The February 2002 issue of Omega contains an article by M.N. Nickel and M.C. Rodriguez which reviews and evaluates research dealing with what is called the "Bowman Paradox" in the literature of strategic management. Using accounting reports from business firms this paradox arises from the persistent showing that risk and...
- Research articles 2003-10-01
- The Impact on Leverage on Hedge Fund Risk and Return
- As in the case of traditional investments, hedge funds are often compared on a risk adjusted basis. Risk adjustment is of particular importance for hedge fund analysis since two funds may differ solely by leverage, such that they may differ on an absolute return basis, but be similar on a...
- White papers 2005-07-07
- Expected Risk-Adjusted Return for Insurance Based Models
- This paper focuses on the kinds of risks, which can be represented by random variables. In particular, the paper analyzes a model denoting the risk portfolio of an insurance company. The paper supposes that the management steers the company by choosing the numbers of independent risks so as to improve...
- White papers 2000-09-26
- Real Asset Ownership and the Risk and Return to Stockholders
- Many corporations own a significant amount of real assets and this includes real estate. However, the effect of real asset ownership on the risk and return for a firm's stockholders is unknown. This study attempts to ascertain the effect, if any, of corporate real asset ownership on the risk and...
- White papers 2003-01-01
- Risk and Return in Fixed Income Arbitrage: Nickels In Front of a Steamroller?
- This paper has conducted an analysis of risk and return characteristics of fixed income arbitrage. It shows that a widely-used fixed income arbitrage strategy based on swap spreads generates sizable positive excess returns over an extended period. The findings shows, that most of these excess returns represent compensation for risk;...
- White papers 2004-04-01
- Risk and Return in Industrial Insurance
- The following paper discusses the challenge between risk and return in the context of the industrial insurance market. The industrial insurance market is highly competitive. Companies have to cope with low premium levels and high losses resulting in high underwriting deficits. Decreasing investment income reduces the overall profitability of the...
- White papers 2001-11-08
- Balancing Risk and Return through Innovation: UC Berkeley/Haas Finance Conference, Nov. 9.(Conference news)
- Byline: Haas School of Business, UC Berkeley BERKELEY, Calif., Nov. 5 AScribe Newswire -- "Balancing Risk and Return Through Innovation" is the focus of the first-ever finance conference at University of California, Berkeley's Haas School of Business. Professionals, academicians, and students will discuss...
- Research articles 2007-11-05
- Risk And Expected Return
- From the executive summary: ‘Every investor has a basic understanding of the nature of risk and reward. The relationship is positively correlated viz. in order to attract investors to take more risk they must expect higher returns. The key word is expected. If the higher expected returns were guaranteed, there...
- White papers 2001-11-20
- Holding Period Return-Risk Modeling: Ambiguity in Estimation
- In this paper we explore the theoretical and empirical problems of estimating average excess return and risk of US equities over various holding periods and sample periods. The findings are relevant for performance evaluation, for estimating the historical equity risk premium, and for investment simulation. Using a unique set of...
- White papers 2003-09-15
- Measurement : Risk Standards 10-16
- The article explains the different risk standards. The risk standard 10 states that all readily priced instruments should be valued daily, less-readily priced instruments at least weekly and non-readily priced instruments as often as feasible and whenever a material event occurs. The standard 11 states that Material discrepancies in valuations...
- White papers 2003-01-01
- Algo Risk for Hedge Funds
- ALGO RISK, an asset class and risk factor agnostic risk solution, provides hedge funds with a robust portfolio-modeling and risk management environment that enables users to measure, manage and optimize risk and return across all long-short and long-only investment strategies. Algo Risk provides hedge fund traders, portfolio managers, risk managers...
- White papers 2005-10-14
- Portfolio Management of Default Risk
- Bank portfolio management has two central features: the measurement of diversification at the portfolio level; and the measurement of how individual assets or groups of assets affect diversification. These measurements require estimates of i probabilities of default for each asset, ii expected recovery in the event of default for each...
- White papers 2001-05-31
- Bond Risk Premia
- This paper studies time variation in expected excess bond returns. We run regressions of annual excess returns on forward rates. We find that a single factor predicts 1-year excess returns on 1-5 year maturity bonds with an R2 up to 43%. The single factor is a tent-shaped linear function of...
- White papers 2002-09-01
- Risk-Adjusted Capital
- This white paper finding suggest that implementation of risk-adjusted capital models are, in most cases, many years off; and that the early adopters will likely either have an pricing advantage, or be the early sellers of their subsidiaries that can't meet their risk adjusted return on capital hurdles. Some companies...
- White papers 2000-09-06
- Evidence On The Tradeoff Between Risk And Return For IPO And SEO Firms
- Do the low long-run average returns of equity issuers reflect underperformance due to mispricing or the risk characteristics of the issuing firms? This paper sheds new light on this question by examining how institutional lenders price loans of equity-issuing firms. The authors found that equity-issuing firms' expected debt return is...
- White papers 2006-02-20
- Asset Allocation Strategies And Their Effect On Risk And Return From 1996 To 2000
- This article talk about the recent volatility in the market has made investors much more aware of the potential risk in their investment portfolios. This article examines the effect that eight broadly defined such as Government Bonds, Corporate Bonds, High Yield Bonds, Foreign Stocks, Utility Stocks etc. investment categories would...
- White papers 2002-03-01
- Market Prices of Risk and Return Predictability in a Joint Stock-Bond Pricing Model
- This paper examines the related questions of the time-series behavior of expected returns and of return predictability, within the framework of the stock-bond pricing model. The key advantage of the model-based approach adopted in this paper is that the quantities of interest (i.e. expected returns, prices of risk, and R2's...
- White papers 2002-06-16
- Risk and return in the U.S. housing market: a cross-sectional asset-pricing approach.
- This article carries out an asset-pricing analysis of the U.S. metropolitan housing market. We use ZIP code-level housing data to study the cross-sectional role of volatility, price level, stock market risk and idiosyncratic volatility in explaining housing returns. While the related literature tends to focus on...
- Research articles 2006-12-22
