Modules for Investors
More about risk and risk management
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Is there any zero-risk investment?
01:17 Mins Read
As an investor, you've no doubt wondered if there's any zero-risk investment, haven't you? We resolve this dilemma in this video.
There are many investment options available in the market. Some of them carry high levels of risk, making them suitable for aggressive investors. Others may carry low levels of risk, making them suitable for conservative investors. But are there any zero-risk investment options? Well, government securities are generally considered to be risk-free investments. They don’t carry any investment risk, because the returns are considered to be guaranteed. This means that the returns you earn will generally be the same as the returns you expect. But they’re still vulnerable to another type of risk - inflationary risk. Bank deposits and treasury bills are also prone to inflation risk. Likewise, all investment options carry some type of risk - one way or another. And so, there are no zero-risk investments, in practice. But in theory, we do have something called the risk-free rate of return. Head to the next chapter of this module to learn more about this.