Let us explore at this stage the concept of interest rate risk. Even though bonds are called risk-free assets, there are several reasons why bonds might actually involve risk. First of all, debtors may fail to meet the payment obligation embedded in the bond. If the debtor fails to meet such payment we say the debtor has defaulted. https://www.expertsmind.com/topic/interest-rate-risk/default-risk-or-credit-risk-92732.aspx