Which of the following statements is false?
A)Default risk is the risk that the borrower is willing but unable to fulfil the terms promised under loan contract.
B)Default risk is the risk that the borrower refinances the loan before maturity.
C)Default risk is the risk that the borrower is able but unwilling to fulfil the terms promised under loan contract.
D)Default risk is the risk that the borrower is unable and unwilling to fulfil the terms promised under loan contract.

Question

Quizplus · Accepted Answer

Default risk refers to the risk that the borrower is unable or unwilling to fulfill the terms promised under the loan contract. Option B states that default risk is the risk that the borrower refinances the loan before maturity, which is not an accurate statement.

Which of the Following Statements Is False