2021 · Q5
The asset or assets that a borrower pledges in order to guarantee repayment of a loan is called as
General KnowledgeIndian Economy
- ACheque
- BCollateral
- CGuarantee card
- DBond
Explanation
Collateral is the asset or assets a borrower pledges to a lender to guarantee repayment of a loan; the lender can seize it on default. A cheque is a payment instruction, a bond is a debt security issued to raise funds, and a 'guarantee card' is not a standard credit concept. Pledging an asset as security is the textbook definition of collateral.