Question

kiera, an entrepreneur, borrows money from a large bank to acquire energy solutions, a small oil and gas company. she promises to repay the bank using the assets of energy solutions as collateral. in this scenario, kiera is involved in a

Answer 1

Kiera is taking out a secured loan using the assets of Energy Solutions as collateral, offering the bank a way to recover the loan in case of default.

Step-by-step explanation:

In this scenario, Kiera is taking out a loan using the assets of Energy Solutions as collateral. This means that if Kiera fails to repay the loan, the bank has the right to seize and sell Energy Solutions' assets to recover the borrowed money. This practice is common in the financial capital market and is a form of secured lending, where the loan is backed by physical assets, mitigating the risk for the bank. Collateral provides a way for lenders to ensure they can recover funds in the event of a default without needing a cosigner.