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Risk-free interest rate - Financial definition

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Translations:      FR  taux d'intérêt sans risque (n.m.) , taux sans risque (n.m.)     ES  tasa de interés sin riesgo (n.f.) , tasa sin riesgo (n.f.)     DE  risikofreier Zinssatz (n.m.) , risikoloser Zinssatz (n.m.) 
Synonyms:  riskless interest rate, risk-free rate

Concise definition of the term risk-free interest rate

The risk-free interest rate for a given maturity is the theoretical return on an investment which is characterized by a complete absence of any risk of financial loss, meaning that there is no uncertainty about future cash flows on interest or repayments.

Comprehensive definition of the term risk-free interest rate

As completely risk-free assets do not exist, Government bonds such as US Treasuries are frequently used as a proxy.

Additional information related to this definition

Definitions of related terms

Government bond  •  Interest rate  •  Investment  •  Treasury bond

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