Which type of tangible collateral includes items such as inventory and equipment?

The correct answer refers to consumer goods, which specifically encompasses tangible collateral that is used or bought for personal, family, or household purposes. However, when it comes to the types of collateral, it's important to highlight that "inventory" and "equipment" are not classified solely as consumer goods; these terms are more aligned with business-related transactions.

Inventory typically includes goods held for sale in the ordinary course of a business, while equipment refers to tangible assets used to produce goods or services. These categories are distinct from consumer goods, which are intended for personal use. In the context of secured transactions, inventory and equipment are categorized under the broader term of commercial goods rather than strictly under consumer goods, thereby making the inclusion of inventory and equipment fundamentally important for understanding secured transactions in a commercial context.

Therefore, when evaluating the categories of tangible collateral, it is essential to understand that while consumer goods are one aspect of tangible collateral, they do not encompass all forms, particularly inventory and equipment, which are specifically related to business operations rather than personal use.