Question

'A' borrowed money from 'B' by handing over her jewellery as a security for the debt. This transaction is called as

• A. Pledge
• B. Sale
• C. Lease
• D. Indemnity

Hint:

A pledge involves the transfer of possession of the asset as security, unlike a sale or lease.

Answer 1

The Correct Option is A

The transaction is called a pledge, which is a type of security interest where personal property is deposited as security for a loan. If the borrower defaults, the lender may sell the pledged asset.