The Likelihood That Borrowers Are Ill and Would Not Be

question 141

Multiple Choice

The likelihood that borrowers are ill and would not be able to make interest and principal payments is an example of

• A) interest rate risk.
• B) credit risk.
• C) liquidity risk.
• D) capital adequacy risk.

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Definitions:

Destination Contract

A type of contract specifying that the seller is responsible for the goods until they are delivered to a specific destination or address as indicated in the contract.

Shipment Contract

A legal agreement where the seller is obligated to send the goods to a specific destination, with the risk of loss passing to the buyer upon delivery to the carrier.

Voidable

A contract or transaction that is valid until one party, who is entitled to do so because of some legal deficiency, chooses to void it.

Dishonored

Refers to a payment instrument, such as a check or bill of exchange, that has been presented for payment but refused.