Can you think of any asset that would be completely riskless? What security comes closest to being riskless? Explain.

An asset that is completely riskless does not exist; however, some investments come close. For example, US Treasury securities are considered to be among the safest investments since they are backed by the full faith and credit of the US government, making them virtually immune to defaulting on their payments. Other options like savings accounts or certificates of deposits (CDs) may also offer a low level of risk as long as they are provided by insured institutions. That being said, even these so-called “riskless” assets have some inherent risks such as inflation eroding returns or fees reducing principal balances over time.