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Question

Difficulty: EasyOccupational and Specialized Registers

During a loan application process at a commercial bank, the loan officer requested that the applicant provide a landed property to guarantee repayment in the event of default. Which specialized banking term refers to an asset pledged by a borrower as security for a loan?

  1. collateralAnswer
  2. B
    dividend
  3. C
    indemnity
  4. D
    premium

Answer

collateral
The word 'collateral' is the precise term used in banking and commercial transactions to denote an asset or property that a borrower commits to a lender to secure a loan.

Step-by-Step Solution

1
Analyze the context of the sentence
The context involves banking operations where a borrower pledges an asset (landed property) to secure a loan against default.
Specialized register terms must precisely fit the operational context of the specified domain.
2
Identify the correct technical term in banking
The term 'collateral' denotes valuable property pledged to guarantee loan repayment.
Among the options, collateral is the standard occupational term for property serving as security for debt repayment.

Key Concept

Occupational and Specialized Registers (Banking and Finance)
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Topics

Occupational and Specialized Registers

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