Information

Collection Risk

<b>Collection Risk</b>

Collection Risk, Insolvency Risk. Uncertainty of receiving the agreed consideration as a consequence of the possibility of default of the obligations by the issuer.

Collection risk is also known as risk of insolvency. For the management of this risk, the information provided by the rating agencies, which assess the quality of issues and issuers on the basis of the possibility of default. The rating or rating You will influence the profitability of the issue.

For example, the possibility that someone who an investment entity fails by not paying interest paid within the deadlines. Government-issued bonds are for the most part immune from risk. Bonds issued by corporate entities are more likely to generate defaults since many companies can fail.

English term: DEFAULT RISK, CREDIT RISK


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