What type of memory loses its data when power is lost?

Volatile memory is characterized by its inability to retain data when the power supply is interrupted. This type of memory requires a constant power source to maintain the stored information, meaning that once the power is turned off or lost, all data in volatile memory is erased. Common examples of volatile memory include Random Access Memory (RAM), which is used for active processes and temporary data storage while a computer is running.

In contrast, non-volatile memory retains its data even when power is lost, making it suitable for long-term storage. Read Only Memory (ROM) is a form of non-volatile memory that is used to store firmware, and cache memory is usually a high-speed form of storage used to speed up data access for the CPU, which typically also retains data when power is lost in the case of certain cache implementations. Therefore, the distinction lies in the fundamental characteristic of volatile memory's dependency on power to retain data, making it the correct answer.