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The potential exposure that any individual firm bears that the second party to any financial contract...

The potential exposure that any individual firm bears that the second party to any financial contract will be unable to fulfill its obligations under the contract is​ called:? A. clearinghouse risk. B. credit risk. C. counterparty risk. D. interest rate risk.

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Answer #1

Option 'C' is correct

Counter party risk.

The potential exposure any individual firm bears that the second party to any financial contract will be unable to fulfill its obligations under the contract's specifications is called the counter party risk.

where as the credit risk is the possibility that a borrower's credit worthiness is reclassified by the lender. interest rate risk is the risk that arises when the interest rate fluctuates and directly affects the value of fixed-income securities.

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