"To defend the truth, to articulate it with humility and conviction, and to bear witness to it in life are therefore exacting and indispensable forms of charity."

H. H. Benedict XVI. Caritas in Veritate Encyclical. June 29, 2009

Saturday, February 16, 2013

No risk free assets

If

1) A security's risk is defined as the variability of return, and
2) US government T-bills' return is not fixed, and
3) a risk-free asset is defined as one with zero risk,

then

T-bills are not risk-free assets.

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