Which one of the following options describe 'Collateral'?
A. Double coincidence of wants
B. Certain products for barter
C. Trade in barter
D. Asset as guarantee for loan
Answers
Answered by
438
option D is 100 percent correct
D. Asset as guarantee for loan
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"Asset as guarantee for loan"
More about Collateral:
Collateral is an asset or property that an individual or entity offers to a banker as security for a loan. It is used as a method to obtain a loan, acting as a protection against potential loss for the lender should the borrower default in his payments. In such an event, the collateral becomes the property of the lender to atone for the unreturned borrowed money.
For example, if a person wants to take out a loan from the bank, he may use his car or the title of a piece of belongings as collateral. If he fails to repay the loan, the collateral may be grabed by the bank, based on the two parties’ agreement.
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