Which risk represents the possibility that a bond issuer will default on interest payments or principal repayment at maturity?

Explanation

* Default (Credit) Risk is the probability that a borrower will fail to meet contractual interest or principal debt obligations.
* Rating agencies (e.g., Moody’s, S&P) assess credit risk through letter ratings (AAA to D).
* Higher credit risk demands higher yield spread above risk-free benchmark rates.