SIE - Securities Industry Essentials Exam

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An issuer has issued the following securities: common stock, convertible bonds, warrants & rights. Which of these 4 securities is exposed to credit risk?

Common stock
A
Convertible bonds
B
Warrants
C
Rights
D

Explanations

Only fixed income securities are exposed to credit risk. The credit risk is that the issuer could not pay the interest or principal on time to the holders of the debt.