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Against your better judgment, you lend $100 to your cousin Manny, who has a reputation for failing to pay back loans. What kind of risk are you taking? A. a liquidity risk B. a time risk C. an inflation rate risk D. a credit risk

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hardysouthern

Answer:

D. a credit risk

Explanation:

It can be found in "Principles for the Management of Credit Risk – final document" that credit risk is defined as "the potential that a bank borrower or counterparty will fail to meet its obligations in accordance with agreed terms". In other words, is the risk of lending money and not receiving it back.

The correct answer is D. Credit Risk