Credit risk

Definition:

The risk that an issuer of debt securities or a borrower may default on its obligations, or that the payment may not be made on a negotiable instrument. Related: Default risk.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

First preferred stock

A type of preferred stock that has priority over other preferred issues and common stock when claiming dividends and assets.

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