Credit or default risk is the risk that interest and principal payments due on the obligation will not be made as required.Select one:TrueFalse

Answer

The statement "Credit or default risk is the risk that interest and principal payments due on the obligation will not be made as required" is True.

Explanation

Credit risk, often referred to as default risk, pertains to the possibility that a borrower or counterparty will fail to meet their debt obligations, which includes both principal and interest payments. This risk is fundamental in finance and investing, as it affects the expected returns on investments and the overall stability of financial markets. If a borrower defaults, the lender may not receive the expected cash flows, which can lead to significant financial losses. Hence, the definition provided accurately captures the essence of credit or default risk.