Answers CMS 2026-2027 Economics and Personal Finance CREDIT RECOVERY PretestQuestion 4

4

lesson pretestMultiple Choice

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Question 4 • CMS 2026-2027 Economics and Personal Finance CREDIT RECOVERY

Which describes the difference between secured and unsecured credit?

Answer

A

Secured credit is backed by an asset equal to the value of a loan, while unsecured credit is not guaranteed by a material object.

B

Unsecured credit is backed by an asset equal to the value of a loan, while secured credit is not guaranteed by a material object.

C

Secured credit is risky because banks cannot seize assets, while unsecured credit is less risky because it is backed by material objects.

D

Unsecured credit enables lenders to seize an asset if a loan is not paid, while secured credit prohibits lenders from taking material objects.

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