MANAGEMENT

Detailed explanation-1: -The danger associated with borrowing money is called credit risk or default risk. If the borrower cannot repay the loan (it becomes default), the investors suffer from reduced income from loan repayments, interests, and principal. Creditors often experience an increment in costs for debt collection.

Detailed explanation-2: -Credit Risk/Default Risk The government or company should repay the amount borrowed over a period with interest. The probability that the issuer of a bond or any other debt security may be unable to make timely payments of interest or repay the principal is referred to as credit risk/default risk.