Risk Terms
Credit Risk
Definition
What is Credit Risk?
The possibility that a borrower or issuer will fail to make promised payments or suffer a downgrade.
Example in practice
How This Looks in Practice
A corporate bondA bond issued by a company. falls in value after investors become less confident that the issuer can repay.
Keep learning
Related Terms
Risk Terms
Market Risk
The possibility of loss because broad market prices or rates move against an investment.
Risk TermsInterest-Rate Risk
The possibility that changing market interest rates will reduce an investment's value or income appeal.
Risk TermsLiquidity Risk
The risk that an asset cannot be sold quickly at a reasonable price or a redemption cannot be met promptly.
MiscellaneousBusiness Day
A day on which relevant financial institutions and markets are open for normal processing.