The chance that a borrower will fail to meet obligations to pay interest and principal as promised is known as:
A)natural conservation of risk.
B)credit risk.
C)default risk.
D)business risk.

Question

Quizplus · Accepted Answer

Default risk is the chance that a borrower will not meet their obligation to pay interest and principal as promised. A lender takes on default risk when they lend money to a borrower, and a borrower's creditworthiness is assessed based on their likelihood of defaulting on their loan.

The Chance That a Borrower Will Fail to Meet Obligations