A valuable asset pledged to obtain a loan and subject to seizure upon default to satisfy the debt is called:
A)capacity.
B)character.
C)capital.
D)collateral.
E)conditions.

Question

Quizplus · Accepted Answer

Collateral is a valuable asset that is pledged by the borrower to the lender as security for a loan. In case of a default, the lender has the right to seize the collateral to recover the outstanding amount. This provides protection to the lender and reduces their risk of loss.

A Valuable Asset Pledged to Obtain a Loan and Subject