Chapter 5, Problem 5AA

To determine

The best word which would fit in as the answer to the question.

Answer to Problem 5AA

Option (e) − Equivalent.

Explanation of Solution

As the concept mentions about the security deposit, that any default in the payment or damage caused is taken by the property holder as a security money from the tenant which is often equivalent to one month’s rent charged.

If  there is no default in the payment  or no damage is done by the end of the tenure or at the time of tenant leaving the property, the security money is given back to the tenant by the property holder as per the agreement.

No other option fits in as the answer to the question because except ‘equivalent’ no other option provides any relation to the security deposit or its worth which can be equal to the one month’s rent.

Economics Concept Introduction

Introduction:

A security deposit is a part-payment at the initial stage of a rental agreement so as to provide the assurance by the tenant to the property holder against any non-payment or any damage caused which has been mentioned in the agreement.