When a financial intermediary purchases a nontraded claim of either a business or an individual, its main concern is with

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When a financial intermediary purchases a nontraded claim, they take on the credit risk of the borrower, as they will not be able to sell this claim to another investor if the borrower defaults. Interest rate risk and reinvestment rate risk are not applicable in this scenario, as the financial intermediary is not purchasing a marketable security with fluctuating interest rates.

When a Financial Intermediary Purchases a Nontraded Claim of Either