Question 1

The UCC's classification or definition of collateral does not affect where or how to perfect a security interest.

Accepted Answer

A) True 
 B)False

Question 2

Bayou Financial Corporation holds a security interest in property owned by Cajun Farms. Perfection of this security interest may not protect Bayou against the claim of

Accepted Answer

A)  a bank.
B)  a buyer in the ordinary course of business.
C)  a subsequent lien creditor.
D)  a trustee in bankruptcy.E) B) and C)
F) A) and D)

Question 3

Ready Credit Inc. holds a security interest in inventory owned by Soy Products Inc. Ready Credit can protect its claim to the inventory in the event of Soy Products' default by

Accepted Answer

A)  assignment.
B)  perfection.
C)  redemption.
D)  retention.E) B) and C)
F) None of the above

Question 4

The UCC does not define the term default . This encourages the parties to a secured transaction to

Accepted Answer

A)  include standards that align with the concept of unconscionability.
B)  run counter to the UCC's provision regarding good faith.
C)  stipulate the conditions that will constitute a default.
D)  provide the creditor with the maximum protection possible.E) B) and D)
F) A) and C)

Question 5

Kiosk Jewelers borrows from Lender Inc. and Mortgage Company, using the same collateral. Only Mortgage Company has a perfected security interest. Kiosk defaults on both loans. The party with first rights to the collateral is

Accepted Answer

A)  Kiosk Jewelers.
B)  none of the choices.
C)  Lender Inc.
D)  Mortgage Company.E) A) and B)
F) B) and C)

Question 6

Loan Office Inc. has a security interest against Manufacturing Company that is enforceable. In other words, with respect to the collateral, the creditor's rights are said to

Accepted Answer

A)  attach.
B)  mature.
C)  perfect.
D)  process.E) B) and C)
F) A) and C)

Question 7

A security interest cannot become perfected without the filing of a security agreement.

Accepted Answer

A) True 
 B)False

Question 8

In a financing statement to give notice of a loan to Lumber Yard Inc., Metro Finance Company wants to include a description of the collateral. A sufficient description would be

Accepted Answer

A)  "all the debtor's personal property."
B)  "all the debtor's assets."
C)  "all the debtor's present and future inventory."
D)  any of the choices.E) C) and D)
F) B) and D)

Question 9

To pay tuition at City College, Dora borrows funds from Equity Credit and gives as security a note on which Dora is the payee. Equity Credit's loan officer agrees to hold the note as collateral. The lender does not file a financing statement. Equity Credit's security interest is perfected because

Accepted Answer

A)  the lender possesses the note.
B)  default on a student loan is not a credible option.
C)  the collateral is intangible.
D)  Dora's other creditors are not aware that Equity Credit holds the note.E) None of the above
F) A) and C)

Question 10

A security agreement determines most of the rights and duties of a debtor and a secured party.

Accepted Answer

A) True 
 B)False

Question 11

Maritime Bank holds a security interest in Ned's fishing trawler. Ned defaults on the debt. Maritime takes possession of the boat and notifies Ned that it will be sold to recover some of the unpaid debt. Before the sale, Ned can regain possession by

Accepted Answer

A)  obtaining a deficiency judgment.
B)  agreeing to a floating lien.
C)  exercising the right of redemption.
D)  requesting a commercially reasonable sale.E) A) and C)
F) All of the above

Question 12

A debtor must have title to collateral to give a secured party a security interest in the property.

Accepted Answer

A) True 
 B)False

Question 13

To create an enforceable security interest for a loan, in terms of the collateral, the debtor must have

Accepted Answer

A)  rights in it.
B)  title to it.
C)  possession of it.
D)  proof of its value.E) B) and C)
F) A) and B)

Exam 30: Secured Transactions

A debtor must have title to collateral to give a secured party a security interest in the property.

Correct Answer
verified

To pay tuition at City College, Dora borrows funds from Equity Credit and gives as security a note on which Dora is the payee. Equity Credit's loan officer agrees to hold the note as collateral. The lender does not file a financing statement. Equity Credit's security interest is perfected because

Correct Answer
verified

Loan Office Inc. has a security interest against Manufacturing Company that is enforceable. In other words, with respect to the collateral, the creditor's rights are said to

Correct Answer
verified

The UCC's classification or definition of collateral does not affect where or how to perfect a security interest.

Correct Answer
verified

The UCC does not define the term default . This encourages the parties to a secured transaction to

Correct Answer
verified

Ready Credit Inc. holds a security interest in inventory owned by Soy Products Inc. Ready Credit can protect its claim to the inventory in the event of Soy Products' default by

Correct Answer
verified

Bayou Financial Corporation holds a security interest in property owned by Cajun Farms. Perfection of this security interest may not protect Bayou against the claim of

Correct Answer
verified

In a financing statement to give notice of a loan to Lumber Yard Inc., Metro Finance Company wants to include a description of the collateral. A sufficient description would be

Correct Answer
verified

Kiosk Jewelers borrows from Lender Inc. and Mortgage Company, using the same collateral. Only Mortgage Company has a perfected security interest. Kiosk defaults on both loans. The party with first rights to the collateral is

Correct Answer
verified

A security interest cannot become perfected without the filing of a security agreement.

Correct Answer
verified

A security agreement determines most of the rights and duties of a debtor and a secured party.

Correct Answer
verified

Maritime Bank holds a security interest in Ned's fishing trawler. Ned defaults on the debt. Maritime takes possession of the boat and notifies Ned that it will be sold to recover some of the unpaid debt. Before the sale, Ned can regain possession by

Correct Answer
verified

To create an enforceable security interest for a loan, in terms of the collateral, the debtor must have

Correct Answer
verified

Exam 30: Secured Transactions

A debtor must have title to collateral to give a secured party a security interest in the property.

Correct AnswerverifiedShow Answer

To pay tuition at City College, Dora borrows funds from Equity Credit and gives as security a note on which Dora is the payee. Equity Credit's loan officer agrees to hold the note as collateral. The lender does not file a financing statement. Equity Credit's security interest is perfected because

Correct AnswerverifiedShow Answer

Loan Office Inc. has a security interest against Manufacturing Company that is enforceable. In other words, with respect to the collateral, the creditor's rights are said to

Correct AnswerverifiedShow Answer

The UCC's classification or definition of collateral does not affect where or how to perfect a security interest.

Correct AnswerverifiedShow Answer

The UCC does not define the term default . This encourages the parties to a secured transaction to

Correct AnswerverifiedShow Answer

Ready Credit Inc. holds a security interest in inventory owned by Soy Products Inc. Ready Credit can protect its claim to the inventory in the event of Soy Products' default by

Correct AnswerverifiedShow Answer

Bayou Financial Corporation holds a security interest in property owned by Cajun Farms. Perfection of this security interest may not protect Bayou against the claim of

Correct AnswerverifiedShow Answer

In a financing statement to give notice of a loan to Lumber Yard Inc., Metro Finance Company wants to include a description of the collateral. A sufficient description would be

Correct AnswerverifiedShow Answer

Kiosk Jewelers borrows from Lender Inc. and Mortgage Company, using the same collateral. Only Mortgage Company has a perfected security interest. Kiosk defaults on both loans. The party with first rights to the collateral is

Correct AnswerverifiedShow Answer

A security interest cannot become perfected without the filing of a security agreement.

Correct AnswerverifiedShow Answer

A security agreement determines most of the rights and duties of a debtor and a secured party.

Correct AnswerverifiedShow Answer

Maritime Bank holds a security interest in Ned's fishing trawler. Ned defaults on the debt. Maritime takes possession of the boat and notifies Ned that it will be sold to recover some of the unpaid debt. Before the sale, Ned can regain possession by

Correct AnswerverifiedShow Answer

To create an enforceable security interest for a loan, in terms of the collateral, the debtor must have

Correct AnswerverifiedShow Answer

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