Uncertainty that the party on the other side of an agreement will abide by the terms of the agreement is referred to as
A) credit risk.
B) exchange rate risk.
C) interest rate risk.
D) price risk.

Question

Quizplus · Accepted Answer

Credit risk refers to the uncertainty that a party to an agreement may default on their financial obligations or fail to abide by the terms of an agreement. Exchange rate risk refers to the uncertainty of future exchange rates affecting the value of payments or receipts in foreign currency. Interest rate risk refers to the uncertainty of changes in interest rates affecting the value of financial instruments. Price risk refers to the uncertainty of changes in prices affecting the value of commodities or securities.

Uncertainty That the Party on the Other Side of an Agreement