Series 79: Counterparty Risk

Taken from our Series 79 Top-off Online Guide

Counterparty Risk

Counterparty risk, a type of credit risk, is the risk to one party to a contract that the other party will default on its obligations under the contract. Counterparty risk tends to be most discussed in the contexts of insurance and unlisted options and other derivatives, but the term properly applies to any risk of non-payment or non-performance under a contract.

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