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Risk-Free Rate Of Return Definition
The risk-free rate of return is the theoretical rate of return of an investment with zero risk.
Risk-Free Rate Puzzle (RFRP) Definition
The risk-free rate puzzle is defined as an anomaly in the difference between the lower historic real returns of government bonds compared to equities.
How Risk Free Is the Risk-Free Rate of Return?
This rate is rarely questioned—unless the economy falls into disarray.
Why are T-Bills used when determining risk-free rates?
The risk-free rate is hypothetical, as every investment has some risk associated with it. Treasury bills are the closest investment to being risk-free.
What Is the Historical Market Risk Premium?
Learn what the historical market risk premium is and the different figures that result from an analyst's choice of calculations for the premium.
Required Rate of Return – RRR Definition
The required rate of return (RRR) is the minimum return an investor will accept for an investment as compensation for a given level of risk.
What's Market Risk vs. Equity Risk Premium?
Read about the differences between equity-risk premium and market-risk premium, two similar concepts that refer to risk-adjusted return on investments.
Risk-Free Return Definition
Risk-free return is a theoretical return on an investment that carries no risk. The interest rate on a three-month treasury bill is often seen as a good example of a risk-free return.
Calculating Required Rate of Return (RRR)
What is the required rate of return? And why is it important for investors and corporations?
Measuring a Portfolio's Performance
Measuring the success of your investment solely on the portfolio return may leave you vulnerable to risk. Learn how to evaluate your investment return.