# 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.