What Refers to the Risk That the Borrower Is Unable

question 111

Multiple Choice

What refers to the risk that the borrower is unable or unwilling to fulfill the terms promised under the loan contract?

• A)Liquidity risk.
• B)Interest rate risk.
• C)Sovereign risk.
• D)Default risk.
• E)Solvency risk.

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Definitions:

Refusal

The act of declining or rejecting an offer, request, or command.

Liability

The state of being legally responsible for something, typically a debt or obligation.

Negotiable Instrument

A legal document guaranteeing the payment of a specific amount of money, either on demand, or at a set time, with the payer named on the document.

Signed

Having affixed one's signature to a document, thereby indicating agreement, consent, or authorization.