The risk that the issuer of a bond may not be able to make timely interest and principal payments is called:
A) Credit risk.
B) Default risk.
C) Market risk.
D) a and b only.
E) All of the above.

Question

Quizplus · Accepted Answer

Credit risk and default risk both refer to the risk that the issuer of a bond may not be able to make timely interest and principal payments, making option D correct.

The Risk That the Issuer of a Bond May Not