An interest rate that assumes no inflation and no uncertainty about future cash flows or repayments. Treasury bills are one example of an investment with a risk-free rate of return, because the U.S. government is perceived to be stable and guarantees payment. This also can be called the pure time value of money.

# real risk-free rate of return - Investment & Finance Definition

Webster's New World Finance and Investment Dictionary Copyright © 2010 by Wiley Publishing, Inc., Indianapolis, Indiana.

Used by arrangement with John Wiley & Sons, Inc.

Used by arrangement with John Wiley & Sons, Inc.

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