Default risk

CFA Level I Derivatives
#1

For forward contracts and alike, Why the CFA institute mentioned:

The party owing the greater amount could default to the other, but the party owing the lesser amount cannot default because its claim on the other party is greater.

why the party owing the lesser amount cannot default ??

is it both party would have the conterparty risk???

Thanks for answering.

#2

The payments on single-currency swaps are generally netted; therefore, the party owing the greater amount will pay the difference to the party owing the lesser amount, and the party owing the lesser amount will receive that difference.

You can’t default if you’re the receiver.

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