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Zorluk: KolayNon-Systematic and Credit Risks

An investor is evaluating a high-yield corporate bond and wishes to assess the likelihood that the issuing company will fail to make scheduled interest or principal payments. Which type of risk is this investor analyzing?

  1. Credit riskCevap
  2. B
    Interest rate risk
  3. C
    Systematic market risk
  4. D
    Municipal tax exemption risk

Cevap

Credit risk
Credit risk (or default risk) measures the financial capability of a debt issuer to pay interest and repay principal on schedule. A high-yield bond issuer carrying lower credit ratings poses higher default/credit risk.

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1
Identify the primary financial threat described in the scenario
The investor is concerned with issuer default on debt obligations (interest or principal).
Risk analysis requires matching the specific concern (issuer default) to its defined financial term.
2
Classify the risk category
Credit risk specifically measures issuer insolvency and default probability for fixed-income instruments.
Default risk is a non-systematic risk unique to the creditworthiness of a specific issuing entity.

Anahtar Kavram

Credit Risk / Default Risk
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Konular

Non-Systematic and Credit Risks

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