The risk associated with borrowers not repaying financial claims is which of the following?
A)exchange rate risk
B)default risk
C)liquidity risk
D)interest rate risk

Question

Quizplus · Accepted Answer

Default risk refers to the possibility that borrowers may not be able to repay their financial claims, leading to a loss of principal for the lender. Exchange rate risk refers to the risk of losses due to fluctuations in currency exchange rates, liquidity risk refers to the risk of not being able to sell an asset quickly enough to meet obligations, and interest rate risk refers to the risk of losses due to changes in interest rates.

The Risk Associated with Borrowers Not Repaying Financial Claims Is