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

A corporate bond falls in value after investors become less confident that the issuer can repay.

Keep learning

The possibility of loss because broad market prices or rates move against an investment.

The possibility that changing market interest rates will reduce an investment's value or income appeal.

The risk that an asset cannot be sold quickly at a reasonable price or a redemption cannot be met promptly.

A day on which relevant financial institutions and markets are open for normal processing.

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