Money-lenders usually demand a ‘security’ from the borrower. What is the formal word used for the ‘security’, such as land, vehicle, livestock, building, etc.?
1 point
Deposit
Collateral
Credit
Auction
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Answer:
The formal word used for the 'security', such as land, vehicle, livestock, building,etc is called "Collateral".
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Collateral is the right answer.
- Collateral is a more formal term, which means a promise of repayment of the loan.
- Collateral security means the giver will take something as a deposit for the money given.
- A deposit is a sum that is given for some period of time.
- Credit means to consume the goods and services but the payment can be paid later.
- Auction means purchasing and selling goods and services, the person who will give the highest bids can purchase the goods.
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