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A Loan That Requires the Borrower to Pledge Specific Assets

question 39

Multiple Choice

A loan that requires the borrower to pledge specific assets as collateral is called a(n) _____ loan.


Definitions:

Annual Interest Rate

The annual interest rate is the percentage of principal charged by the lender for the use of its money over one year.

Down Payment

An initial upfront partial payment for the purchase of expensive items/services such as a home or a car.

Annual Payments

Payments made once a year, often related to loans, leases, or insurance policies.

Lease

A contractual agreement where one party, the lessor, grants another party, the lessee, the right to use an asset for a specified period in exchange for payments.

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