Economics Bonds Questions
Bond default risk refers to the possibility that the issuer of a bond will be unable to make timely interest payments or repay the principal amount at maturity. It is the risk that the issuer may default on its financial obligations, resulting in a loss for bondholders. Factors that contribute to bond default risk include the financial health and creditworthiness of the issuer, economic conditions, industry-specific risks, and changes in interest rates. Bond default risk is typically measured by credit rating agencies, with higher-rated bonds considered to have lower default risk compared to lower-rated bonds.