Sovereign Risk Differs from Credit Risk Because It Is Dependent

question 32

True/False

Sovereign risk differs from credit risk because it is dependent on the financial status of the government rather than the counterparty itself.

---

Definitions:

Positive Economics

A branch of economics focused on the description and explanation of economic phenomena, as opposed to normative economics which prescribes policies.

Value Judgments

Assessments based on personal or societal preferences, beliefs, or ethics, as opposed to objective measurements.

Policy Alternatives

Various strategies or plans of action that policy-makers can consider and potentially implement to address specific public issues.

Scientific Study

A systematic and objective investigation conducted to acquire knowledge and understand natural phenomena through observation and experimentation.