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Question
Which of the following is not correct about collateral security?
Options
It is a primary security.
It is an additional security.
It is a subsidiary security.
It is a secondary security.
MCQ
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Solution
It is a primary security.
Explanation:
Collateral security is an additional or secondary security given by a borrower in addition to the primary security (like plant and machinery) to secure a loan. Therefore, it cannot be the “primary security” itself.
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