Question

In a secured loan, collateral is _____.
a.
valuable property that the borrower promises to give the lender in the event of default on the loan
b.
an agreement made in civil court agreeing that the borrower may be arrested in the event of default on the loan
c.
an agreement signed by a co-borrower promising to pay the loan in the event the primary borrower defaults on the loan
d.
and insurance policy taken out by the lender and paid for by the borrower to cover the lender from loss in the event of default


Please select the best answer from the choices provided

A
B
C
D

Answer 1

A. Collateral is valuable property the borrower pledges to the lender to secure the loan and that can be taken if the borrower defaults.