Risk-free asset
= Risk-free asset
{title2=$R=1/B$}
For a fixed horizon, a <risk-free asset> has a deterministic terminal payoff. If the price of a unit terminal payoff is $B>0$, its gross return is $R=1/B$. In a finite state market, the sum of the <Arrow state prices> is $B$. Risk-free does not mean that a longer-maturity bond has a deterministic resale price before its maturity.