Economics · Money and Credit
Given below are two statements. Choose the correct option: Statement (I): Collateral is an asset that the borrower owns (such as land, building, vehicle, livestocks, deposits with banks) and uses this as a guarantee to a lender until the loan is repaid. Statement (II): If the borrower fails to repay the loan, the lender has the right to sell the asset or collateral to obtain payment.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Statement (I) is false but Statement (II) is true
- 2Statement (I) is true but Statement (II) is false
- 3Both Statement (I) and Statement (II) are false
- 4Both Statement (I) and Statement (II) are true✓
Correct answer
Both Statement (I) and Statement (II) are true
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