The portion of the risk premium that is based on the ability of the borrower to repay principal and interest is the ____ risk.
A) maturity
B) default
C) seniority
D) marketability

Question

Quizplus · Accepted Answer

The default risk premium is specifically related to the borrower's ability to repay the principal and interest. It reflects the risk of the borrower defaulting on their obligations.

The Portion of the Risk Premium That Is Based on the Ability