Credit Risk Refers to the Probability That the Issuer of a Bond

question 133

True/False

Credit risk refers to the probability that the issuer of a bond will fail to pay some or all of the interest or principal.

---

Definitions:

Priming

A psychological phenomenon where exposure to one stimulus influences the response to a subsequent stimulus, without conscious guidance or intention.

Missing-child Poster

A public notice that displays information and a photograph of a child who has been reported missing, aimed at soliciting the public's help in locating the child.

Kidnapping

The illegal act of abducting someone typically to obtain a ransom or fulfill another motive against the victim's will.

Ambiguous Interaction

A situation or exchange where signals, intentions, or messages are unclear or have multiple interpretations, leading to uncertainty in communication.