Question

8. Assertion : Collateral is an asset that the borrower
owns (such as land, building, vehicle, livestock,
deposits with banks) and uses this as a guarantee to a lender until the loan is
гераid.
Reason: Collateral is given as the lender can sell the
collateral to recover the loan amount if the borrower
fails to repay the loan.​

Answer 1

BOTH ASSERTION AND REASON ARE TRUE AND REASON IS THE CORRECT EXPLANATION OF ASSERTION.

Answer 2

ANSWER :- (A) Both assertion and reasson are true, and reason is the corret explanation of assertion.

EXPLANATION :- Property such as land titles, deposits with banks. livestock are some common examples of collateral used for borrowing. In case of failure of repayment of koan, the leader can sell the collateral to reover the loan amount.