Question : Which of the following is an asset that the borrower owns (such as land, building, vehicle, livestock, deposits with banks) and uses as a guarantee to a lender until the loan is repaid?
Option 1: Frills
Option 2: Lease
Option 3: Collateral
Option 4: Credit
Correct Answer: Collateral
Solution : The correct answer is Collateral .
The asset that a borrower owns and uses as collateral or a guarantee to a lender until the loan is repaid is typically referred to as "collateral" or "security." This can include various types of assets, such as land, buildings, vehicles, livestock, or deposits with banks.
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