What is a risk free portfolio?
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Moreover, is it possible to construct a risk free portfolio?
Yes it is A possible to construct a portfolio of stocks that has an expected return equal to the risk-free rate. Such kind of portfolios are also called zero beta portfolio that have zero systematic risk.
Likewise, is it true that US Treasury security is risk free? U.S. Treasuries are probably the closest things we have to risk-free securities, but they are only risk-free in the sense that the default risk is quite low. Even if they have no default risk, however, they still have interest rate risk. The security is indeed risk-free if and only if you hold it to maturity.
Also know, what is a risk free security?
A security which is free of the various possible sources of risk. One is the risk that the debtor may default; this is thought to be absent in the case of UK, US, and many other countries' government debt.
What conditions are necessary for a risk free asset to be free of risk provide an example is it really risk free?
A risk-free asset is one that has a certain future return—and virtually no possibility of loss. Debt obligations issued by the U.S. Department of the Treasury (bonds, notes, and especially Treasury bills) are considered to be risk-free because the "full faith and credit" of the U.S. government backs them.