A borrower has not met their scheduled loan repayment and is considered to be in default by their bank who plans to sell the borrowers house to recover its debt. After careful risk analysis, the banks risk manager expects there may be no loss. Based on the information provided, which of the following statements best describes the risk?

Select one:

a. The bank has no financial risk because the likelihood of default is certain.

b. The bank has financial risk because the consequence of default is uncertain.

c. The bank has no risk because the risk manager believes there will be no loss.

d. The bank has financial risk because the likelihood of default is uncertain.