What is defined as something of value given to secure repayment of a debt?

The correct answer is that collateral is defined as something of value given to secure repayment of a debt. In the context of financial transactions, collateral is an asset pledged by a borrower to secure a loan. Should the borrower fail to repay the debt, the lender has the right to seize the collateral to recover the loss. This mechanism reduces the risk for lenders and can also enable borrowers to access loans they might not qualify for without such security.

Investment refers to the act of putting money into a venture with the expectation of earning a profit, but it does not inherently involve securing repayment of a debt. A down payment is typically a portion of the total cost that a buyer pays upfront when purchasing property and does not relate to securing a loan in the same manner as collateral. An asset is any resource owned by an individual or entity that holds economic value, but it does not specifically denote something pledged for debt repayment. Thus, collateral is the term that precisely captures the concept of securing a loan with an asset.