Question

which of the following best describes a loan?
select a response.

• a type of insurance coverage for unexpected losses
• a borrower promises to repay money from a lender
• a government grant for education
• a tax deduction for mortgage interest payments

Explanation:

• Option 1: Insurance is for risk coverage, not a loan.
• Option 2: A loan involves a borrower (who gets money) and a lender (who provides money), with the borrower agreeing to repay, which matches the definition of a loan.
• Option 3: A grant is money given without repayment, unlike a loan.
• Option 4: A tax deduction is related to tax benefits, not the definition of a loan.

Answer:

B. A borrower promises to repay money from a lender