Which of the following cases is an example of credit risk?

[I] Seller of credit default swap defaults when buyer files a claim

[II] Buyer of credit default swap defaults when seller files a claim

[III]Buyer of just bond (high yield bond) resells the bond in the secondary market at fair value.

[IV] Likelihood that a firm defaults on a loan originally rated A+

[V] Lending money to a borrower under a condition in which the loan is categorized as sub-prime

[VI] Likelihood that a municipal bond goes into default

[VII] A bong issue by the Treasury Department during a financial crisis.

1) I, II, IV, VII

2) I, IV, V, VI

3) II, III, V, VII

4) III, IV, V, VI