Final answer:
In the financial capital market, lenders underwrite loans by assessing a borrower's income, conducting credit checks, and sometimes requiring a cosigner or collateral to secure the loan.
Step-by-step explanation:
In the financial capital market, lenders evaluate income sources as part of the underwriting process when considering a loan application. Prospective borrowers are required to provide detailed information about their income, which helps lenders assess their ability to repay the loan. To further mitigate risk, lenders will conduct a credit check to review the individual's borrowing history. They may also request additional security measures such as a co-signer who agrees to repay the debt if the original borrower defaults, or collateral like property or equipment that the bank can claim and sell to recoup losses in case of non-payment.