n NISM Certifications
XV NISM Series XV
Medium

The risk that a company may fail to meet its debt obligations is known as:

Practice question from NISM XV Mock Test 7 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Liquidity Risk

  2. B

    Call Risk

  3. C

    Business Risk

  4. Credit Risk

    Correct answer

Why this is the answer

Credit risk is the risk of default on debt obligations. Liquidity risk involves converting assets to cash, business risk relates to operations, and call risk involves early redemption of bonds.

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