Reported 2 days ago
Counterparty risk refers to the likelihood that the other party in a financial transaction may fail to meet their obligations. To manage this risk, investors can implement various strategies such as conducting due diligence, utilizing collateral agreements, diversifying counterparties, regularly monitoring financial health, and employing credit default swaps and third-party clearinghouses. By incorporating these approaches, businesses and investors can mitigate potential losses and better navigate the uncertainties associated with counterparty reliability.
Source: YAHOO