MANAGEMENT

BUISENESS MANAGEMENT

RISK MANAGEMENT

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Failure of the borrower to pay its debt obligation may refer to?
A
Solvency Risk
B
Credit Risk
C
Liquidity Risk
D
Interest Rate risk
Explanation: 

Detailed explanation-1: -Credit risk is the possibility of a loss resulting from a borrower’s failure to repay a loan or meet contractual obligations. Traditionally, it refers to the risk that a lender may not receive the owed principal and interest, which results in an interruption of cash flows and increased costs for collection.

Detailed explanation-2: -Credit risk is the possibility of losing a lender holds due to a risk of default on a debt that may arise from a borrower failing to make required payments. In the first resort, the risk is that of the lender and includes lost principal and interest, disruption to cash flows, and increased collection costs.

Detailed explanation-3: -Credit risk is the possibility of a loss happening due to a borrower’s failure to repay a loan or to satisfy contractual obligations. Traditionally, it can show the chances that a lender may not accept the owed principal and interest.

Detailed explanation-4: -Different factors are used to quantify credit risk, and three are considered to have the strongest relationship: probability of default, loss given default, and exposure at default.

There is 1 question to complete.