Risk refers to the likelihood that a company will eventually default, or fail to make required interest or principal payments, on its bonds.

Name: Risk refers to the likelihood that a company will eventually default, or fail to make required interest or principal payments, on its bonds.
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Quizplus · Accepted Answer

Risk, in the context of bonds, indeed refers to the possibility that the issuer will not be able to make the required payments, including both interest and principal, leading to default.

Risk Refers to the Likelihood That a Company Will Eventually