Credit risk:
A) is the risk of a borrower defaulting on a loan.
B) occurs when one party to a transaction has more information than the other.
C) is the amount a borrower must pay in interest over the term of a loan.
D) is the risk of not being able to qualify for a loan.

Question

Quizplus · Accepted Answer

Credit risk refers to the risk that a borrower may default on their loan, meaning they can't pay back what they have borrowed according to the agreed terms. It is a significant risk for lenders who are looking for borrowers to take on a loan or invest in their business.

Credit Risk