Final answer:
The correct answer is collateral (option a). Collateral refers to something valuable, often property or equipment, that a lender has the right to seize and sell if the borrower does not repay the loan.
Step-by-step explanation:
The correct answer is collateral (option a).
Collateral refers to something valuable, often property or equipment, that a lender has the right to seize and sell if the borrower does not repay the loan. It acts as security pledged for the payment of the loan.
For example, if a person wants to borrow money from a bank to buy a car, the bank may require collateral in the form of the car itself. If the person fails to repay the loan, the bank can seize the car and sell it to recover the outstanding balance.