Which term refers to something tangible pledged by a borrower to secure a loan?

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Multiple Choice

Which term refers to something tangible pledged by a borrower to secure a loan?

Explanation:
Collateral is the tangible asset a borrower offers to back a loan. It serves as a security for the lender: if the borrower can’t repay, the lender has the right to seize the collateral to recover the money. This arrangement lowers the lender’s risk and often results in a lower interest rate for the borrower. Examples include a house for a mortgage or a car for an auto loan. The other terms don’t describe pledged security: darts have no connection to loans, capital is general wealth or funds, and a decision matrix is a planning tool, not a loan security concept.

Collateral is the tangible asset a borrower offers to back a loan. It serves as a security for the lender: if the borrower can’t repay, the lender has the right to seize the collateral to recover the money. This arrangement lowers the lender’s risk and often results in a lower interest rate for the borrower. Examples include a house for a mortgage or a car for an auto loan. The other terms don’t describe pledged security: darts have no connection to loans, capital is general wealth or funds, and a decision matrix is a planning tool, not a loan security concept.

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