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Question

Difficulty: EasyOccupational and Specialized Registers

The commercial bank refused to approve the business loan application because the applicant failed to pledge adequate ________ as security for the facility. Which of the following specialized terms correctly completes the sentence?

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

Answer

The correct term is 'collateral'.
In banking and finance register, 'collateral' refers specifically to valuable assets pledged by a borrower as security for loan repayment, perfectly completing the sentence context.

Step-by-Step Solution

1
Analyze the financial context of the sentence stem
The sentence describes a banking scenario where a loan applicant must provide an asset as guarantee or security to obtain a credit facility.
Specialized banking registers require specific terms to describe assets used to secure loans.
2
Evaluate the occupational register terms provided in the options
'Collateral' is the precise banking register term for an asset pledged by a borrower to secure loan repayment.
Other options belong to corporate profit sharing (dividend), insurance payments (premium), or sales transaction fees (commission).

Key Concept

Occupational and Specialized Registers - Banking and Finance Terminology
Estimated Time:45s
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Topics

Occupational and Specialized Registers

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