The term 'Arboreal Marsupial' refers to a type of mammal that lives in trees and has a pouch for carrying its young. The most well-known example of this type of animal is the KOALA, which has five letters in its name. Koalas are native to Australia and are known for their distinctive grey fur and large ears. They feed mainly on eucalyptus leaves and spend most of their time sleeping in the branches of trees.