The possibility that the issuer of a bond will not pay the contractual interest or principal payments as scheduled is called maturity risk.

Question

Quizplus · Accepted Answer

The possibility that the issuer of a bond will not pay the contractual interest or principal payments as scheduled is called credit risk, not maturity risk. Maturity risk refers to the risk associated with changes in interest rates that can impact a bond's value as it approaches maturity.

The Possibility That the Issuer of a Bond Will Not