n NISM Certifications
XXI NISM Series XXI-A
Medium

Which of the following best describes "Credit Risk"?

Practice question from NISM XXI A for PMS - Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. The risk of default on debt obligations

    Correct answer

  2. B

    The risk of interest rate fluctuations

  3. C

    The risk of currency exchange rate changes

  4. D

    The risk of market price decline

Why this is the answer

Credit risk pertains to the possibility that borrowers will fail to meet debt obligations.

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