Something of value that by agreement becomes the property of the lender if the borrower defaults is called:
A) a stock.
B) a bond.
C) collateral.
D) a liability.

Question

Quizplus · Accepted Answer

Collateral is something of value that a borrower pledges to a lender as security for repayment of a loan. If the borrower defaults on the loan, the lender has the right to seize the collateral and sell it to recover the amount of money owed. Stocks and bonds are financial instruments, and liabilities are debts owed by a company or individual.

Something of Value That by Agreement Becomes the Property of the Lender