Series 66: Credit Risk

Taken from our Series 66 - NASAA Uniform Combined State Law Exam

Definition of the term Credit Risk...

the risk of an actual or perceived decline in an issuer’s creditworthiness. One type of credit risk is default risk, which is the risk that a borrower or bond issuer will fail to make payments when due. Another type is credit deterioration risk, which is the risk that an issuer will suffer a downgrade in its credit.

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