Question 1

To be valid, a security agreement must set forth the creditor's rights upon the debtor's default.

Accepted Answer

A) True 
 B)False

Question 2

What is repossession?

Accepted Answer

A) a right granted to the debtor to take possession of the collateral after repayment of the debt 
B) a right granted to the debtor to take possession of the collateral before repayment of the debt 
C) a right granted to a secured creditor to take possession of the collateral upon default by the debtor 
D) the act of possession of the collateral by the court owing to default by both debtor and creditor 
A) a right granted to the debtor to take possession of the collateral after repayment of the debt 
B) a right granted to the debtor to take possession of the collateral before repayment of the debt 
C) a right granted to a secured creditor to take possession of the collateral upon default by the debtor 
D) the act of possession of the collateral by the court owing to default by both debtor and creditor

Question 3

The term ________ refers to a secured creditor's possession of collateral upon a debtor's default and proposal to retain the collateral in satisfaction of the debtor's obligation.

Accepted Answer

A) repossession 
B) disposal of the goods 
C) disposition of collateral 
D) retention of collateral 
A) repossession 
B) disposal of the goods 
C) disposition of collateral 
D) retention of collateral

Question 4

A creditor who has the only secured interest in the debtor's collateral has priority over unsecured interests.

Accepted Answer

A) True 
 B)False

Question 5

Outline the priority of claims.

Accepted Answer

1.A creditor who has the only secured in

Question 6

________ is an interest a creditor automatically obtains when he or she extends credit to a consumer to purchase consumer goods.

Accepted Answer

A) Purchase money security interest 
B) Cumulative security interest 
C) Future advance monetary interest 
D) Default interest 
A) Purchase money security interest 
B) Cumulative security interest 
C) Future advance monetary interest 
D) Default interest

Question 7

A(n)________ is a situation in which a creditor has an enforceable security interest against a debtor and can satisfy the debt out of the designated collateral.

Accepted Answer

A) floating lien 
B) secured transaction 
C) attachment 
D) redemption 
A) floating lien 
B) secured transaction 
C) attachment 
D) redemption

Question 8

Kelly borrows $12, 000 from Terry Oswald to pay for her mother's surgery.The debt-repayment period is 15 months but Kelly manages to repay it in 11 months.Which of the following must be filed by Oswald after receiving the final installment of his money?

Accepted Answer

A) financing statement 
B) statement of collateral claim 
C) termination statement 
D) continuation statement 
A) financing statement 
B) statement of collateral claim 
C) termination statement 
D) continuation statement

Question 9

Which of the following is true of priority of claims?

Accepted Answer

A) If two or more secured parties claim an interest in the same collateral but only one has perfected his or her security interest, the perfected security interest has priority. 
B) Although one of the parties to claim an interest in the collateral has perfected his or her security interest, all the parties are given fair and equal priority. 
C) If two or more secured parties claim an interest in the same collateral but neither has a perfected claim, they are given equal priority irrespective of attachments. 
D) If two or more secured parties claim an interest in the same collateral but neither has a perfected claim, the first to claim has priority. 
A) If two or more secured parties claim an interest in the same collateral but only one has perfected his or her security interest, the perfected security interest has priority. 
B) Although one of the parties to claim an interest in the collateral has perfected his or her security interest, all the parties are given fair and equal priority. 
C) If two or more secured parties claim an interest in the same collateral but neither has a perfected claim, they are given equal priority irrespective of attachments. 
D) If two or more secured parties claim an interest in the same collateral but neither has a perfected claim, the first to claim has priority.

Question 10

________ permits a secured lender to recover other property or income from a defaulting debtor if the collateral is insufficient to repay the unpaid loan.

Accepted Answer

A) Redemption right 
B) Deficiency judgment 
C) Disposition of collateral 
D) Retention of collateral 
A) Redemption right 
B) Deficiency judgment 
C) Disposition of collateral 
D) Retention of collateral

Question 11

When a buyer obtains a loan from a bank to pay the seller, the transaction is known as a(n)________.

Accepted Answer

A) attachment 
B) floating-lien 
C) two-party secured transaction 
D) three-party secured transaction 
A) attachment 
B) floating-lien 
C) two-party secured transaction 
D) three-party secured transaction

Question 12

Attachments are funds advanced to a debtor from a line of credit secured by collateral.

Accepted Answer

A) True 
 B)False

Question 13

A three-party secured transaction occurs when a seller sells goods to a buyer who has obtained financing from a third-party lender who takes a security interest in the goods sold.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following refers to the resulting assets from the exchange or disposal of collateral subject to a security agreement?

Accepted Answer

A) sale proceeds 
B) future advances 
C) floating lien 
D) after-acquired property 
A) sale proceeds 
B) future advances 
C) floating lien 
D) after-acquired property

Question 15

Tangible personal property includes securities, patents, trademarks, and copyrights.

Accepted Answer

A) True 
 B)False

Question 16

If a lender extends unsecured credit to a debtor, the creditor takes no interest in any collateral to secure the loan.

Accepted Answer

A) True 
 B)False

Question 17

Chattel paper is considered as tangible personal property.

Accepted Answer

A) True 
 B)False

Question 18

Perfection of a security interest establishes the right of a secured creditor against other creditors who claim an interest in the collateral.

Accepted Answer

A) True 
 B)False

Question 19

Darrel, Smith, Keith and Aaron are claimants to a collateral interest.Smith and Darrel secure their interest.Aaron takes physical possession of the collateral.Keith files a financing statement some time later.Who among the four would have highest priority of claim to the collateral?

Accepted Answer

A) Darrel 
B) Smith 
C) Keith 
D) Aaron 
A) Darrel 
B) Smith 
C) Keith 
D) Aaron

Question 20

Repossession refers to a right granted to a secured creditor to take possession of the collateral upon default by the debtor.

Accepted Answer

A) True 
 B)False

Exam 27: Secured Transactions and E-Filing

To be valid, a security agreement must set forth the creditor's rights upon the debtor's default.

What is repossession?

The term ________ refers to a secured creditor's possession of collateral upon a debtor's default and proposal to retain the collateral in satisfaction of the debtor's obligation.

A creditor who has the only secured interest in the debtor's collateral has priority over unsecured interests.

Outline the priority of claims.

________ is an interest a creditor automatically obtains when he or she extends credit to a consumer to purchase consumer goods.

A(n)________ is a situation in which a creditor has an enforceable security interest against a debtor and can satisfy the debt out of the designated collateral.

Kelly borrows $12, 000 from Terry Oswald to pay for her mother's surgery.The debt-repayment period is 15 months but Kelly manages to repay it in 11 months.Which of the following must be filed by Oswald after receiving the final installment of his money?

Which of the following is true of priority of claims?

________ permits a secured lender to recover other property or income from a defaulting debtor if the collateral is insufficient to repay the unpaid loan.

When a buyer obtains a loan from a bank to pay the seller, the transaction is known as a(n)________.

Attachments are funds advanced to a debtor from a line of credit secured by collateral.

A three-party secured transaction occurs when a seller sells goods to a buyer who has obtained financing from a third-party lender who takes a security interest in the goods sold.

Which of the following refers to the resulting assets from the exchange or disposal of collateral subject to a security agreement?

Tangible personal property includes securities, patents, trademarks, and copyrights.

If a lender extends unsecured credit to a debtor, the creditor takes no interest in any collateral to secure the loan.

Chattel paper is considered as tangible personal property.

Perfection of a security interest establishes the right of a secured creditor against other creditors who claim an interest in the collateral.

Darrel, Smith, Keith and Aaron are claimants to a collateral interest.Smith and Darrel secure their interest.Aaron takes physical possession of the collateral.Keith files a financing statement some time later.Who among the four would have highest priority of claim to the collateral?

Repossession refers to a right granted to a secured creditor to take possession of the collateral upon default by the debtor.

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