Concerning international lending risk of commercial banks,____ refers to the probability that part/all of the interest/principal of a loan will not be repaid.

Question

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Credit risk refers to the risk that a borrower will default on their loan payments, resulting in non-payment of both interest and principal. This is the most directly relevant risk to the repayment of a loan, and therefore the primary concern of commercial banks engaged in international lending. Country risk (A) refers to broader factors affecting investment in a particular country, such as political risk and regulatory risk. Currency risk (C) refers to the potential for fluctuations in exchange rates to affect the value of international loans, but does not necessarily impact the borrower's ability to repay the loan. Presidential risk (D) is not a commonly used term in international lending risk analysis.

Concerning International Lending Risk of Commercial Banks,____ Refers to the Probability