Default Risk

question 88

Multiple Choice

Default risk

• A) is the probability that a borrower will not pay in full the promised coupon or principal.
• B) exists only for the bonds of small corporations.
• C) is also known as market risk.
• D) is zero for bonds issued by cities and states.

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Definitions:

Agree To Terms

The act of formally consenting to the conditions presented in a contractual agreement.

Sales Contract

A contract for the sale of goods under which the ownership of goods is transferred from a seller to a buyer for a price.

Shipment

The process of transporting goods from one location to another, often involving multiple carriers or modes of transport.

Special Business Standards

Specific codes of conduct, practices, and operational benchmarks set for businesses in certain sectors to enhance quality, safety, and ethics.