Risk-Free Rate Of Return

Risk-Free Rate Of Return is the theoretical rate of return of an investment with zero risk. The Risk-Free Rate Of Return is used in some performance measures such as the Sharpe Ratio and Sortino Ratio.

Risk-Free Rate Of Return

Risk-Free Rate Of Return is the theoretical rate of return of an investment with zero risk. 

 


Explanation of Risk-Free Rate Of Return

The Risk-Free Rate Of Return represents the interest an investor would expect from what is perceived to be a risk-free investment over a specified period of time. Investors often use T-Bills as the "risk free" investment.  The Risk-Free Rate Of Return is used in some performance measures such as the Sharpe Ratio and Sortino Ratio.


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