Which of the following describes counterparty risk?

You are implementing Credit Risk Analyzer .

Which of the following describes counterparty risk? Note: There are 2 correct answers to this question.
A . It relates to a counterparty not fulfilling their contractual agreements.
B . It is subdivided into credit risk and settlement risk.
C . It is reportable in Market Risk Analyzer.
D . It exists only during the settlement period of the trades.

Answer: AB

Explanation:

Counterparty risk is one of the types of risk that can be analyzed using Credit Risk Analyzer. Counterparty risk describes the risk that a counterparty does not fulfill their contractual agreements, either partially or fully. Counterparty risk can be subdivided into credit risk and settlement risk. Credit risk is the risk that a counterparty defaults on their obligations before maturity. Settlement risk is the risk that a counterparty defaults on their obligations at maturity.

Reference: https://help.sap.com/viewer/0fa84c9d9c634132b7c4abb9ffdd8f06/2020.002/en-US/3a3a8f6f7a6e4c2b8d5b8f1e2a2a0d5b.html