CFA Practice Question

There are 252 practice questions for this study session.

CFA Practice Question

The degree of likelihood that the borrower of a loan will not be able to make the necessary scheduled principal and interest payments is referred to as:

A. Default probability.
B. Loss given default.
C. Present value of expected loss.
Correct Answer: A

The higher the default probability, the more risky the bond, holding everything else constant.

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