23
QuizMultiple Choice

3.7 How Credit Works

Question 23 • TX-Personal Financial Literacy and Economics

What is collateral?

Answer
A
a type of unsecured credit
B
property given as security for a loan
C
funds borrowed to buy property
D
a payment to reduce overall debt

Explanation

Collateral is property pledged to a lender as security for a loan. If the borrower does not repay, the lender may be able to take that property. Therefore, “property given as security for a loan” is the correct choice.

AI-written and checked against the verified answer.

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