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Railways PYQCBT 2 2017

RRB NTPC · Question 2

Collateral security for a loan is:

  1. a liability of the lender

  2. owned by the lender

  3. an asset of the borrower

  4. a liability of the borrower

Show answer & explanation

Answer: (C) an asset of the borrower

Explanation

Collateral is an asset owned by the borrower and pledged to the lender as security. The lender can seize it only if the loan is not repaid.