What is Risk-Free Debt?

What is Risk-Free Debt?

The concept of risk-free debt is deeply embedded in financial markets as short-hand for high-quality liquid debt that retains its value over time. In the first video of this series, Keith explains what is meant by "risk-free" and how nothing in financial markets can ever carry zero risk.
Overview

Risk-free debt is deeply embedded in financial markets as short-hand for high-quality liquid debt that typically retains its value over time. Also, it’s referred to as debt that has a zero chance of defaulting.

Key learning objectives:

  • Define Risk-free debt and identify its properties

  • Be able to calculate expected return using CAPM

  • Define HQLA, and explain their benefits

  • Discuss the different types and examples of HQLA

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Summary
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Expert
Keith Mullin

Keith Mullin

Keith is the founder and director of KM Capital Markets, a media and thought-leadership consultancy. He spent the past 35 years working in specialist capital markets media and has had a ring-side seat at all of the major market events. Prior to setting up KM Capital Markets in 2017, Keith worked at Thomson Reuters.

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