Security posted by a promissory note maker to the lender for repayment of money is known as collateral.

Question

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Collateral refers to the security posted by a borrower to a lender to ensure repayment of the loan. It can be in the form of assets like property, shares, or a promissory note. In this case, the security is in the form of a promissory note, which is a legally binding document promising the repayment of a loan.

Security Posted by a Promissory Note Maker to the Lender