When a debtor uses borrowed money from the secured party to buy the collateral,a(n) ________ interest is formed.

A) leveraged
B) third-party beneficiary
C) purchase-money security
D) incidental beneficiary
E) perfected security

Purchase-Money Security

A legal interest or lien on a piece of property which secures the repayment of the funds used to purchase the property.

Collateral

An asset pledged by a borrower to secure a loan, subject to seizure in the event of default.

Secured Party

A secured party refers to an individual or entity that holds an interest in the secured property, typically as collateral, to secure payment or performance of an obligation.