Final answer:
The chance that a bond issuer will not be able to make timely payments is referred to as credit quality risk, which represents the possibility that an issuer may default on its bond obligations. Option A
Step-by-step explanation:
The term that describes the chance that the bond issuer will not be able to make timely payments is known as credit quality risk. This type of risk is concerned with the possibility of the issuer defaulting on its obligations to pay the bond's interest or principal at the agreed-upon times.
If a corporate bond issuer fails to make the payments, this can lead to actions such as bankruptcy, where the company may have to sell off its assets to repay as much as it can to the bondholders.
Bonds are typically used by companies or governments as a way to raise funds by borrowing from investors. When investors purchase bonds, they are essentially lending money to the issuer in exchange for periodic interest payments and the return of the bond's face value at maturity.
The attractiveness of a bond to an investor is significantly influenced by changes in interest rates. Option A