Exam 19: Secured Transactions

A purchase-money security interest in consumer goods is perfected automatically at the time of a credit sale.

Lena borrows from Mac and Nicol,using the same farm equipment as collateral for both loans.Only Nicol has a perfected security interest.Lena defaults on both loans.The party with first rights to the collateral is

Corporate Bank wants to perfect its security interest in inventory owned by Outdoor Outfitters,Inc.Most likely,a financing statement should be filed with

Clear Lake Credit Corporation lends funds to Donny,a consumer,to apply to the cost of a boat,which is the collateral for the loan.An enforceable security interest requires

The "first-in-time" rule means that an unperfected security interest takes priority over a perfected security interest.

Elias repays his debt,incurred to buy consumer goods,to Fidelity Bank and immediately files a written request for a termination state-ment.Fidelity

Valley Furniture Store sells household consumer goods on credit for which Valley files a financing statement to perfect a security interest in the goods. With the filing of subsequent continuation statements,the ef-fectiveness of the statement can be continued

Middling Credit Corporation asks Little Supply Company to agree to a security agreement that provides for coverage of the proceeds from the sale of after-acquired prop-erty.This is

Jane is the secured party in a secured transaction with Margaret.Jane could also be referred to as the

Idle Investments,Inc.,and Harbor Bank are secured parties with secu-rity interests in property owned by GR8 Manufacturing Corporation.Priority between these security interests is generally determined by

Angie borrows $20,000 from First Line Credit using a field of timber trees as collateral.To perfect its security interest,First Line Credit must file its financing statement with

A financing statement cannot be the same as the security agreement.

Jason is the creditor in a transaction with Carol,who is the debtor.Which of the following requirements is not necessary for Jason to have an enforceable security interest?

The payment of Hu's debt to Ian is guaranteed by Hu's personal prop-erty.To give notice of his interest in Hu's property to other creditors,Ian is most likely to

A financing statement must include the creditor's signature.

Efrem owns Fans & Players,a retail sporting goods shop.When Great Hill Lodge,a new ski resort,is built in the area,Efrem decides to expand and borrows a large sum from Hometown Bank.The bank takes a secu-rity interest in Efrem's present inventory and any after-acquired inven-tory as collateral for the loan.The bank properly perfects the security in-terest by filing a financing statement.Efrem's business is profitable,and he begins doubling his inventory. A year later,an avalanche destroys the ski slope and lodge.Efrem's business takes a turn for the worse,and he defaults on his debt to the bank.The bank seeks possession of his en-tire inventory,even though the inventory is twice as large as it was when the loan was made.Efrem claims that the bank has rights to only half of his inventory.Is Efrem correct? Explain.

Khalil holds a security interest in inventory owned by Luc.Khalil pro-tects his claim to the inventory in the event of Luc's default by

For a creditor to have an enforceable security interest,the debtor must have rights in the collateral.

A debtor is the person in whose favor there is a security interest.

Quotient Financial Corporation is a secured party with a security inter-est in property owned by Retail Sales Company.Perfection of this secu-rity in-ter-est may not protect Quotient Financial against the claim of