Riskless arbitrage

Riskless arbitrage

Riskless arbitrage

The simultaneous purchase and sale of the same asset to yield a profit.

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Risk-free rate

Risk-free rate

Risk-free rate

The rate earned on a riskless asset.

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Risk-adjusted profitability

Risk-adjusted profitability

Risk-adjusted profitability

A probability used to determine a “sure” expected value (sometimes called a certainty equivalent) that would be equivalent to the actual risky expected value.

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Risk premium

Risk premium

Risk premium

The reward for holding the risky market portfolio rather than the risk-free asset. The spread between Treasury and non-Treasury bonds of comparable maturity.

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