Counterparty risk

Counterparty risk,

Definition of Counterparty risk:

  1. Counterparty risk is the likelihood or probability that one of those involved in a transaction might default on its contractual obligation. Counterparty risk can exist in credit, investment, and trading transactions.

  2. Probability of loss arising from the actions of the other party to a transaction.

  3. Varying degrees of counterparty risk exists in all financial transactions. Counterparty risk is also known as default risk. Default risk is the chance that companies or individuals will be unable to make the required payments on their debt obligations. Lenders and investors are exposed to default risk in virtually all forms of credit extensions. Counterparty risk is a risk that both parties should consider when evaluating a contract.

How to use Counterparty risk in a sentence?

  1. Counterparty risk is the likelihood or probability that one of those involved in a transaction might default on its contractual obligation. Counterparty risk can exist in credit, investment, and trading transactions.
  2. Investors must consider the company that's issuing the bond, stock, or insurance policy to assess whether there's default or counterparty risk.
  3. The numerical value of a borrower's credit score reflects the level of counterparty risk to the lender or creditor.

Meaning of Counterparty risk & Counterparty risk Definition

Counterparty Risk,

How To Define Counterparty Risk?

The counterparty's risk is the possibility that one of the parties to the transaction will not fulfill its contractual obligations. There may be a counterparty risk in credit, investment and commercial transactions.

  • The risk of a counterparty is the possibility that none of the people involved in the transaction will fulfill their contractual obligations. There may be a counterparty risk in credit, investment and commercial transactions.
  • The numerical value of a lender's credit quality reflects the risk to the lender or the lender's counterpart.
  • Investors should consider companies issuing bonds, stocks or insurance policies to assess whether there is a risk of default or a counterpart.

Literal Meanings of Counterparty Risk

Counterparty:

Meanings of Counterparty:
  1. Partners in contracts or financial matters.

Sentences of Counterparty
  1. The goal for the clearing house is mutual benefit between each member and the clearing house: otherwise, the two separate banks that have entered into an agreement with the defaulting counterpart will not be able to meet each other's advantages and disadvantages.

Risk:

Meanings of Risk:
  1. Possibility of something unpleasant or undesirable.

  2. A person or thing that is seen as a threat or a potential source of danger.

  3. Where there is insurance, there is the possibility of injury or damage.

  4. A person or thing that is considered right or wrong in a particular context or in a particular way.

  5. Possible financial loss.

  6. Injury, loss or damage (to someone or something of value).

  7. Doing or not doing things that increase the likelihood of an accident (unpleasant or undesirable)

  8. If you take part (in any action) you run the risk of unfortunate consequences.

Sentences of Risk
  1. All outdoor activities involve hazards

  2. He was close to the situation, he knew the dangers, he knew what they could gain from such crimes and he knew what would happen if they were caught, which was very small.

  3. Young children on the farm should be limited to exposure to hazards. Older young people need strict training and supervision.

  4. They are aware of the risks and the risks associated with the system used.

  5. Despite the dangers, dangers, and lack of information about this person, Eva found herself in this powerful embrace.

  6. The proliferation of networks and their technology clearly reveals new threats and dangers.

  7. They are usually part of a broader local discourse about life issues, difficulties, hazards and risks.

Synonyms of Risk

effect, put on the line, uncertainty, put at risk, gamble with, advance, take the risk of, jeopardy, insecurity, occasion, wager, hazard, expose to danger, fear, danger, generate, riskiness, instability, gamble, take a chance with, cause, bring about, be the cause of, promote, put in jeopardy, precariousness, have a hand in