Final answer:
A suretyship provides security for a creditor without involving property interest, backed by a third party's promise. It is distinct from collateral, where actual property or equipment is used as security. The correct answer to the question is A. Suretyship.
Step-by-step explanation:
The answer to the question 'A ________ provides security for a creditor without involving an interest in the property, where the security for the creditor is provided by a third person's promise to be responsible for the debtor's obligation' is A. Suretyship.
In the context of financial obligations, a suretyship occurs when one party, the surety, guarantees to a creditor (such as a bank) that they will fulfill the debt or other obligation of another party, the principal, if that party fails to meet their obligation. A cosigner is an example of a surety, who legally pledges to repay some or all of the money on a loan if the original borrower does not. This is different from requiring collateral, which refers to something valuable — often property or equipment — that a lender would have the right to seize and sell if the borrower does not repay the loan.