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Treasuries
Treasury Bill
CAPM
Excess Return

Risk-free Rate
Term category: Finance/Accounting
In 10 words or less: The rate of return on a riskless investment (such as a treasury bill).

Definition: The risk-free rate of return is a theoretical rate of return on an investment with no risk.

StockJargon Advice: The risk-free return is usually considered to be the return offered on treasury bills.  The reason for this is because the government is considered to be the most creditworthy borrower and you are absolutely guaranteed to get your principal back when you invest in these.

Historically, the risk-free rate has been around 3.5-4.5% and is influenced by interest rate movements.

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