Final answer:
Amortising a loan means to gradually pay off the loan principal alongside interest over a certain period. It makes the loan an asset to the bank, which can sell it on the secondary loan market. Option B is correct.
Step-by-step explanation:
“Amortising the loan” refers to option B) Gradually pay off the loan principal along with interest over time. This means that the borrower repays parts of the loan principal and the interest in regular installments until the entire loan is paid off. For example, when a family takes out a 30-year mortgage loan to purchase a house, they agree to repay the loan over the next 30 years through consistent payments, an arrangement that benefits the bank, as it is considered an asset due to the legal obligation of the borrower to make payments over time. The value of such a loan can be assessed in current terms by estimating what it might sell for in the secondary loan market—where loans issued in the primary loan market are traded among financial institutions.