An asset used to secure a loan is called.
A) collateral.
B) a retainer.
C) a down payment.
D) an investment.

Question

Quizplus · Accepted Answer

Collateral is an asset that a borrower pledges to a lender as security for a loan. If the borrower defaults on the loan, the lender can seize the collateral to recover their losses. A retainer is a fee paid in advance for professional services, a down payment is an initial payment made when buying a large-ticket item, and an investment is money put into something with the expectation of profit or benefit.

An Asset Used to Secure a Loan Is Called