BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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a sales agreement
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a custodial payment
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an unsecured loan
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a collateralized loan
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Detailed explanation-1: -Typically, the collateral for secured short-term loans is accounts receivable or inventory. Because accounts receivable are normally quite liquid (easily converted to cash), they are an attractive form of collateral.
Detailed explanation-2: -A secured loan known as a “collateral loan” requires the debtor to commit a specific asset, such as real estate or financial security, in exchange for loan approval. If the debtor is unable to pay the lender, the lender may be able to collect the loan amount by taking possession of the collateral.
Detailed explanation-3: -B. What is meant by an uncollateralized loan? A.) A loan not backed by a co-signer who agrees to cover the amount of the loan.
Detailed explanation-4: -A default occurs when a borrower stops making the required payments on a debt. Defaults can occur on secured debt, such as a mortgage loan secured by a house, or unsecured debt, such as credit cards or a student loan. Defaults expose borrowers to legal claims and may limit their future access to credit.