Question

​a man borrows money from an automobile dealership to pay for a car. if he fails to repay the loan, the dealership will take possession of the car. in this situation, the dealership is (a) _____, the car is (a) _____, and the man is (a) _____.

Answer 1

Select one:

a. ​creditor, collateral, borrower

b. ​borrower, creditor, collateral

c. ​credit union, loan, creditor

d. ​loan, collateral, creditor

Answer: a - creditor, collateral, borrower.

The automobile dealership loans money to the man to buy a car. So, the automobile dealership is the creditor.

Collateral refers to anything that may be pledged in return for money, with the condition that the pledged item will be forfeited if the money is not repaid. Since the dealership will take possession of the car if the man fails to repay the money, it is a collateral.

The man who bought the car, owes money to the automobile dealership as he bought the car on a loan. So, he is a borrower.

Answer 2

Answer:

The correct answer is option A, Creditor, Collateral, Borrower.

Explanation:

A man borrows money from an automobile dealership to pay for a car. If he fails to repay the loan, the dealership will take the possession of the car. In this case, the dealership is Creditor, the car is Collateral and the man is Borrower.

Creditor is the one who lends the money. Collateral is the thing that is being pledged. and Borrower is the person who borrows the money.