Risk-Free Asset Definition
An asset whose future return is known with certainty. The certainty comes from a confidence in the issuer of the asset. For example, U.S. treasury securities are considered to be risk-free because they are backed by the U.S. government. All financial assets carry some degree of risk, therefore there is no such thing as an absolutely risk-free asset, but the level of risk is small in case of U.S. Treasuries. These kinds of assets can still be subject to inflation risk.