Credit Risk in Derivatives Vs Fixed Income question, default, different, 201

LorrinCFA

Can someone help:

I seem to have conflicting definitions of credit risk and am worried that depending on where in the curriculum a question sits, a different one needs applying.

Reading 53 General Principles of Credit Analysis clearly states that the credit risk of a bond is made up of

1. default risk
2. credit spread risk
3. downgrade risk

Check out end of chapter question 1 page 201.

Reading 65 on using Credit Derivatives however, has a table showing how a CDS spread encapsulates 'pure credit risk' (page 357) but in the text -and logically- a CDS only prices default risk (given the definition of a credit event) and not credit spread risk nor downgrade risk. In theory anyway.

Have they dumbed it down slightly for reading 65 or have I answered my own question as they state 'PURE credit risk'. The doubt is then kept alive as the glossary says credit risk as being the same as default risk!