Collateral is A. the difference between the value of a bank's assets and the value of a bank's liabilities. B. assets pledged to the bank in the event the borrower defaults. C. the interest rate that banks charge highminusquality borrowers. D. required reserves minus excess reserves.

They are used to assess loans from a bank. They protect banks from possible loss if the lender should default on his loans. If a default occurs, the collateral qoold je owned by the bank.

Types of collateral are :

1. Real estate

2. Inventory financing: inventory serves as collateral

3. Cash secured loan

I hope my answer helps you

jepessoa jepessoa · Answer 2 · 2020-03-26T03:58:09+01:00

Answer:

B) assets pledged to the bank in the event the borrower defaults.

Explanation:

There are two types of bank loans:

secured loans: the borrower pledges an asset (or assets) as collateral for the loan, e.g. a car is pledged as collateral for an auto loan.
unsecured loans: basically personal loans, where the loan is handed out based on the borrower's creditworthiness (usually established by the borrower's credit score), and no collateral is pledged.

Collateral is A. the difference between the value of a​ bank's assets and the value of a​ bank's liabilities. B. assets pledged to the bank in the event the borrower defaults. C. the interest rate that banks charge highminusquality borrowers. D. required reserves minus excess reserves.

Respuesta :

Otras preguntas

Collateral is A. the difference between the value of a bank's assets and the value of a bank's liabilities. B. assets pledged to the bank in the event the borrower defaults. C. the interest rate that banks charge highminusquality borrowers. D. required reserves minus excess reserves.