Asked by Jordan Storberg on Jul 09, 2024
Verified
A(n) ________ loan is one in which creditors have something of value,usually called ________,which they can ________ if the debtor ________.
A) priority;collateral;sell;defaults
B) unsecured;collateral;sell;dies
C) unsecured;collateral;possess;defaults
D) secured;collateral;possess;defaults
Priority Loan
A type of loan that is given precedence over other debts, often in the context of repayment terms and bankruptcy proceedings.
Collateral
Assets pledged by a borrower to secure a loan or credit, which the lender can seize if the borrower defaults.
Defaults
Situations in which parties fail to fulfill their obligations under a contract or agreement.
- Distinguish the different categories and attributes of secured transactions.
Verified Answer
SG
Sharleen GarzaJul 11, 2024
Final Answer :
D
Explanation :
The definition of a secured loan includes the presence of collateral which the creditor can possess and sell if the debtor defaults. Choice A has a correct definition of a secured loan but the term "priority" does not fit. Choice B has a correct definition of collateral but does not match the definition of a secured loan. Choice C has an incorrect definition of a secured loan as the creditor cannot possess collateral without a security agreement.
Learning Objectives
- Distinguish the different categories and attributes of secured transactions.