Which of the following risks could significantly affect a company's suppliers and customers?

Credit risk is the correct choice because it pertains specifically to the possibility that a counterparty, such as a supplier or customer, may default on their contractual obligations, resulting in financial losses for the company. This type of risk directly impacts cash flow and operational viability, as a supplier failing to deliver goods or a customer unable to pay invoices can disrupt the company's operations and financial stability.

In contrast, market risk generally concerns fluctuations in market prices that affect the overall financial environment but do not specifically target the relationships with suppliers or customers. Sovereign risk relates to the risk of a country defaulting, which can affect businesses generally but does not directly address the interactions of a company with individual suppliers or customers. Default risk is often considered synonymous with credit risk but is typically framed more narrowly regarding an individual borrower's failure to meet obligations rather than the wider implications for suppliers and customers. Thus, credit risk encompasses the essence of how a company's suppliers and customers could be significantly affected by their financial reliability.