Which of the following terms best describes a loan where a larger line of credit or lower interest rate has been obtained by providing collateral to back that loan?

Question

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An asset-backed line of credit is a loan where collateral is provided to back the loan, which can result in a larger line of credit or lower interest rate compared to an unsecured loan. A term loan is a loan where the borrower receives the full amount of the loan upfront and repays it over a set term period. A revolving line of credit is a type of loan where the borrower can draw and repay funds as needed up to a certain credit limit. A private placement is a way for companies to raise capital by selling securities directly to a small group of investors, rather than through a public offering. None of these terms specifically refer to a loan backed by collateral.

Which of the Following Terms Best Describes a Loan Where