Question 1

The perfection obtained by filing a financing statement lasts for __________.

Accepted Answer

A) ​five (5) years, and is renewable. 
B) five (5) years, and is non-renewable. 
C) ​ten (10) years, and is renewable. 
D) ​ten (10) years, and is non-renewable. 
A) ​five (5) years, and is renewable. 
B) five (5) years, and is non-renewable. 
C) ​ten (10) years, and is renewable. 
D) ​ten (10) years, and is non-renewable.

Question 2

Creditors cannot legally request collateral on a previously unsecured loan.

Accepted Answer

A) True 
 B)False

Question 3

A creditor must file a financing statement for a security interest to attach.

Accepted Answer

A) True 
 B)False

Question 4

Field warehousing is an example of perfection by the mere by possession of the collateral.

Accepted Answer

A) True 
 B)False

Question 5

Security agreements allow for "blanket" descriptions of collateral that do not provide specific details on the specific type of collateral involved.

Accepted Answer

A) True 
 B)False

Question 6

Suzy wants to borrow cash from Bruce.She offers him a security interest in her neighbor's diamond ring, which she has been told that she or her sister will receive after their neighbor passes away.Regarding Suzy's proposal, which of the following statements is true?

Accepted Answer

A) ​Bruce cannot take a security interest in the ring, because Suzy does not have rights to the collateral. 
B) Bruce must have the ring in his possession or have a written agreement from Suzy describing the ring in order to obtain a security interest in it. 
C) Suzy must not have legal rights to the ring if she is going to give Bruce a security interest. 
D) Suzy must not give Bruce something of value as a security interest. 
A) ​Bruce cannot take a security interest in the ring, because Suzy does not have rights to the collateral. 
B) Bruce must have the ring in his possession or have a written agreement from Suzy describing the ring in order to obtain a security interest in it. 
C) Suzy must not have legal rights to the ring if she is going to give Bruce a security interest. 
D) Suzy must not give Bruce something of value as a security interest.

Question 7

A debtor must have rights in the collateral for a security interest to attach.

Accepted Answer

A) True 
 B)False

Question 8

Collateral may change its form and character during the course of a security agreement.

Accepted Answer

A) True 
 B)False

Question 9

When there are two perfected secured creditors in the same collateral: ______.

Accepted Answer

A) ​priority goes to the creditor who perfected first. 
B) priority goes to the creditor who is owed the greatest amount of money. 
C) ​each perfected secured creditor has a 50% interest in the collateral. 
D) ​both perfected secured creditors are treated like unsecured creditors in regards to the collateral. 
A) ​priority goes to the creditor who perfected first. 
B) priority goes to the creditor who is owed the greatest amount of money. 
C) ​each perfected secured creditor has a 50% interest in the collateral. 
D) ​both perfected secured creditors are treated like unsecured creditors in regards to the collateral.

Question 10

A(n) __________ statement is a document, which may be requested by a paid-up debtor, stating that a security interest is no longer claimed under the specified financing statement.

Accepted Answer

A) ​execution 
B) discharge 
C) termination 
D) hold harmless 
A) ​execution 
B) discharge 
C) termination 
D) hold harmless

Question 11

Suppose Harvey is a secured creditor and Joe is the debtor. If Harvey sells the collateral because Joe defaulted, Joe is not liable for any deficiency.

Accepted Answer

A) True 
 B)False

Question 12

Under Revised UCC Article 9, a debtor may authorize a financing statement by acquiring the collateral that is subject to the security agreement.

Accepted Answer

A) True 
 B)False

Question 13

Property that is subject to a security interest is called collateral.

Accepted Answer

A) True 
 B)False

Question 14

Consumer goods are classified into different categories based on the physical characteristics of the goods.

Accepted Answer

A) True 
 B)False

Question 15

Creditors receive an automatic 30-day temporary perfection in negotiable instruments taken as collateral.

Accepted Answer

A) True 
 B)False

Question 16

When a state statute requires a security interest in a motor vehicle to be noted on the certificate of title, the security interest is perfected:

Accepted Answer

A) ​by the certificate notation, when a non-inventory motor vehicle is involved. 
B) by filing under the UCC, regardless of how the vehicle is classified. 
C) by filing under the UCC, when the motor vehicle is inventory. 
D) either by the certificate notation or by a UCC filing, depending on how the state statute defines the term motor vehicle. 
A) ​by the certificate notation, when a non-inventory motor vehicle is involved. 
B) by filing under the UCC, regardless of how the vehicle is classified. 
C) by filing under the UCC, when the motor vehicle is inventory. 
D) either by the certificate notation or by a UCC filing, depending on how the state statute defines the term motor vehicle.

Question 17

An interest in personal property or fixtures that secures payment or performance of an obligation is called a(n): ______.

Accepted Answer

A) ​guaranty holding. 
B) security interest. 
C) guaranty interest. 
D) good-faith guaranty. 
A) ​guaranty holding. 
B) security interest. 
C) guaranty interest. 
D) good-faith guaranty.

Question 18

Because the financing statement is intended as notice to third parties, it must be filed in a public place.

Accepted Answer

A) True 
 B)False

Question 19

If a breach of the peace might occur:

Accepted Answer

A) ​self-help repossession is the only option available to obtain the collateral. 
B) the creditor must use court action to obtain the collateral. 
C) ​the creditor is barred from repossessing the collateral. 
D) ​the collateral reverts to the debtor. 
A) ​self-help repossession is the only option available to obtain the collateral. 
B) the creditor must use court action to obtain the collateral. 
C) ​the creditor is barred from repossessing the collateral. 
D) ​the collateral reverts to the debtor.

Question 20

Grund, a professional night club musician, financed the purchase of a drum set to be used in his night club act.Under Article 9, the drum set will be classified as a consumer good.

Accepted Answer

A) True 
 B)False

Exam 33: Secured Transactions in Personal Property

The perfection obtained by filing a financing statement lasts for __________.

Creditors cannot legally request collateral on a previously unsecured loan.

A creditor must file a financing statement for a security interest to attach.

Field warehousing is an example of perfection by the mere by possession of the collateral.

Security agreements allow for "blanket" descriptions of collateral that do not provide specific details on the specific type of collateral involved.

Suzy wants to borrow cash from Bruce.She offers him a security interest in her neighbor's diamond ring, which she has been told that she or her sister will receive after their neighbor passes away.Regarding Suzy's proposal, which of the following statements is true?

A debtor must have rights in the collateral for a security interest to attach.

Collateral may change its form and character during the course of a security agreement.

When there are two perfected secured creditors in the same collateral: ______.

A(n) __________ statement is a document, which may be requested by a paid-up debtor, stating that a security interest is no longer claimed under the specified financing statement.

Suppose Harvey is a secured creditor and Joe is the debtor. If Harvey sells the collateral because Joe defaulted, Joe is not liable for any deficiency.

Under Revised UCC Article 9, a debtor may authorize a financing statement by acquiring the collateral that is subject to the security agreement.

Property that is subject to a security interest is called collateral.

Consumer goods are classified into different categories based on the physical characteristics of the goods.

Creditors receive an automatic 30-day temporary perfection in negotiable instruments taken as collateral.

When a state statute requires a security interest in a motor vehicle to be noted on the certificate of title, the security interest is perfected:

An interest in personal property or fixtures that secures payment or performance of an obligation is called a(n): ______.

Because the financing statement is intended as notice to third parties, it must be filed in a public place.

If a breach of the peace might occur:

Grund, a professional night club musician, financed the purchase of a drum set to be used in his night club act.Under Article 9, the drum set will be classified as a consumer good.

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