Consumers borrow money from commercial institutions by:
A)demonstrating the present value of their life- cycle income stream.
B)turning legal control of their future activities over to the lender.
C)providing a legally enforceable conditional claim against assets.
D)appealing to the lender's good will.

Question

Quizplus · Accepted Answer

Providing a legally enforceable conditional claim against assets is the most common way for consumers to borrow money. This means that the borrower pledges a specific asset, such as a house or car, as collateral in case they are unable to repay the loan. The lender can then legally seize this asset if the borrower defaults on the loan. Choices A and B are not accurate explanations for how consumers borrow money, and choice D is unlikely to be successful in securing a loan.

Consumers Borrow Money from Commercial Institutions By