Collateral is
Answer & Solution
Correct answer: A.
1. Collateral: an asset that the borrower pledges as security.
2. Land, building, vehicle, livestock, deposits etc. are common collateral.
3. If the borrower defaults, the lender can sell the collateral to recover the loan.
_Source: NCERT Class 10 Understanding Economic Development, Ch 3 "Money and Credit"_
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