As a borrower, Iris pledges one of her assets, a vacation property, th

QUESTION

As a borrower, Iris pledges one of her assets, a vacation property, that she realizes she’ll have to forfeit if the loan is not repaid. What type of loan is this?

A) a secured loan
B) an unsecured loan
C) a loan with no collateral
D) a trade credit
E) a transaction loan

ANSWER

Answer: A
Explanation: A) When a borrower pledges some sort of asset, such as personal property, that is forfeited if the loan is not repaid, this is considered a secured loan.