________ is the possibility that the borrower's creditworthiness is reclassified by the lender at the time of renewing credit. ________ is the risk of changes in interest rates charged at the time a financial contract rate is set.
A) Credit risk; Interest rate risk
B) Repricing risk; Credit risk
C) Interest rate risk; Credit risk
D) Credit risk; Repricing risk

Question

Quizplus · Accepted Answer

Credit risk involves the possibility of a borrower's creditworthiness being reclassified by the lender, often at the time of credit renewal. Repricing risk is related to the risk of changes in interest rates at the time a financial contract's rate is determined.

________ Is the Possibility That the Borrower's Creditworthiness Is Reclassified