Identify the risk of loss from failure of a counterparty, or second party, in a derivatives contract to perform as agreed or contracted.
A)Prepayment risk
B)Concentration risk
C)Credit risk
D)Reinvestment risk
E)Leverage risk

Question

Quizplus · Accepted Answer

Credit risk is the risk of loss stemming from a counterparty's failure to meet the obligations as outlined in a derivatives contract or any financial agreement.

Identify the Risk of Loss from Failure of a Counterparty