Question 1

Which of the following is true about continuation statements?

Accepted Answer

A)  A continuation statement must be filled after the lapse of the five year period of the financing statement. 
B)  The continuation statement must be signed by the secured party. 
C)  The effectiveness of the financing statement has nothing to do with the continuation statement. 
D)  Continuation statements may be filed just once. 
A)  A continuation statement must be filled after the lapse of the five year period of the financing statement. 
B)  The continuation statement must be signed by the secured party. 
C)  The effectiveness of the financing statement has nothing to do with the continuation statement. 
D)  Continuation statements may be filed just once. B

Question 2

The secured party whose interest in fixtures is perfected will have priority where the security interest is perfected prior to the time the goods become fixtures.

Accepted Answer

A) True 
 B)False  True

Question 3

In which of the following cases will perfection by attachment not be effective?

Accepted Answer

A)  The goods were sold on conditional sales contract to the consumer. 
B)  The creditor has lent money to enable a consumer to buy goods. 
C)  The consumer good is a motor vehicle. 
D)  The goods were sold on a time-payment plan to the consumer. 
A)  The goods were sold on conditional sales contract to the consumer. 
B)  The creditor has lent money to enable a consumer to buy goods. 
C)  The consumer good is a motor vehicle. 
D)  The goods were sold on a time-payment plan to the consumer. C

Question 4

A retailer of consumer goods who relies on attachment of a security interest to perfect it does not prevail over a bona fide purchaser:

Accepted Answer

A)  who has knowledge of the security interest. 
B)  who gives value for the goods. 
C)  who buys goods for household use. 
D)  who resells the good in the absence of a financing statement. 
A)  who has knowledge of the security interest. 
B)  who gives value for the goods. 
C)  who buys goods for household use. 
D)  who resells the good in the absence of a financing statement.

Question 5

What is the general priority rule established by the Uniform Commercial Code?

Accepted Answer

The basic rule established by the Code i

Question 6

Which of the following corresponds to the priority rule for purchase money security interest in inventory?

Accepted Answer

A)  The PMSI has priority if it is perfected at the time the debtor receives possession of the inventory. 
B)  The PMSI has priority if it is perfected within 20 days after the debtor receives possession of the inventory. 
C)  The PMSI has priority if the holder of the competing security interest received notification within three years before the debtor receives the inventory. 
D)  The PMSI has priority when it has been filed or perfected before the other interest on the same collateral. 
A)  The PMSI has priority if it is perfected at the time the debtor receives possession of the inventory. 
B)  The PMSI has priority if it is perfected within 20 days after the debtor receives possession of the inventory. 
C)  The PMSI has priority if the holder of the competing security interest received notification within three years before the debtor receives the inventory. 
D)  The PMSI has priority when it has been filed or perfected before the other interest on the same collateral.

Question 7

Why is filing a financing statement the only practical way to perfect a security interest in equipment?

Accepted Answer

Possession by the creditor is usually no

Question 8

A _____ serves as constructive notice to the world that the creditor claims an interest in collateral that belongs to a certain named debtor.

Accepted Answer

A)  model audit 
B)  financial report 
C)  financing statement 
D)  continuation statement 
A)  model audit 
B)  financial report 
C)  financing statement 
D)  continuation statement

Question 9

Which of the following is a way of perfecting a security interest?

Accepted Answer

A)  Mere attachment of security interest 
B)  Filing a private notice 
C)  Creditor making a private sale of the collateral 
D)  Debtor retaining the possession of the collateral 
A)  Mere attachment of security interest 
B)  Filing a private notice 
C)  Creditor making a private sale of the collateral 
D)  Debtor retaining the possession of the collateral

Question 10

The perfection of a security interest by filing a financing statement:

Accepted Answer

A)  serves to protect the secured party's interest in the collateral against most creditors who acquire a security interest in the same collateral after the filing. 
B)  is necessary to enable the secured party to enforce its security interest against the debtor. 
C)  serves to give the public actual notice. 
D)  gives the secured party priority over all other parties who acquire an interest in the collateral after the filing. 
A)  serves to protect the secured party's interest in the collateral against most creditors who acquire a security interest in the same collateral after the filing. 
B)  is necessary to enable the secured party to enforce its security interest against the debtor. 
C)  serves to give the public actual notice. 
D)  gives the secured party priority over all other parties who acquire an interest in the collateral after the filing.

Question 11

What type of agreement is required in nearly all security interest transactions?

Accepted Answer

A)  An authenticated security agreement 
B)  An international depositor's agreement 
C)  Foreign Assignment agreement 
D)  Title conveyance agreement 
A)  An authenticated security agreement 
B)  An international depositor's agreement 
C)  Foreign Assignment agreement 
D)  Title conveyance agreement

Question 12

The basic priority rule for competing security interests is that the first secured party to attach wins.

Accepted Answer

A) True 
 B)False

Question 13

Under the UCC Secured Transactions Article,for a security interest to attach,the:

Accepted Answer

A)  debtor must agree to the creation of the security interest. 
B)  creditor must properly file a financing statement. 
C)  debtor must be denied of all rights in the collateral. 
D)  creditor must take and hold the collateral. 
A)  debtor must agree to the creation of the security interest. 
B)  creditor must properly file a financing statement. 
C)  debtor must be denied of all rights in the collateral. 
D)  creditor must take and hold the collateral.

Question 14

Which section of the UCC defines what constitutes default in a secure transaction?

Accepted Answer

A)  2-205 
B)  3-104 
C)  The UCC does not define default;it is defined in private agreements between the parties. 
D)  9-102 
A)  2-205 
B)  3-104 
C)  The UCC does not define default;it is defined in private agreements between the parties. 
D)  9-102

Question 15

Safeco Corporation manufactures toys for distribution to retailers.In Safeco's hands,the toys are consumer goods.

Accepted Answer

A) True 
 B)False

Question 16

In which of the following orders are the proceeds from the sale of collateral by the secured party distributed?

Accepted Answer

A)  Debtor,creditor's debt,selling expenses,and junior interests 
B)  Selling expenses,creditor's debt,junior interests,and debtor 
C)  Creditor's debt,selling expenses,debtor,and junior interests 
D)  Junior interests,debtor,selling expenses,and creditor's debt 
A)  Debtor,creditor's debt,selling expenses,and junior interests 
B)  Selling expenses,creditor's debt,junior interests,and debtor 
C)  Creditor's debt,selling expenses,debtor,and junior interests 
D)  Junior interests,debtor,selling expenses,and creditor's debt

Question 17

Samson Dsouza submits a financing statement in the year 2000 to perfect his security interest against Kevin.Later in the year 2006,Samson tries to attach the security interest in the property.Will Samson succeed in the attachment of the security interest?

Accepted Answer

A)  Samson will succeed since he has filed his financing statement. 
B)  Samson will not succeed as the financing statement has lapsed. 
C)  Samson may enforce his security interest by filing continuation statement. 
D)  The security interest will automatically be enforced. 
A)  Samson will succeed since he has filed his financing statement. 
B)  Samson will not succeed as the financing statement has lapsed. 
C)  Samson may enforce his security interest by filing continuation statement. 
D)  The security interest will automatically be enforced.

Question 18

Attachment of a security interest is a necessary condition for its perfection.

Accepted Answer

A) True 
 B)False

Question 19

A security interest is said to be a property interest in the collateral.

Accepted Answer

A) True 
 B)False

Question 20

Perfection by mere attachment of the security interest does not require giving of public notice.

Accepted Answer

A) True 
 B)False

Exam 29: Security Interests in Personal Property

Which of the following is true about continuation statements?

The secured party whose interest in fixtures is perfected will have priority where the security interest is perfected prior to the time the goods become fixtures.

In which of the following cases will perfection by attachment not be effective?

A retailer of consumer goods who relies on attachment of a security interest to perfect it does not prevail over a bona fide purchaser:

What is the general priority rule established by the Uniform Commercial Code?

Which of the following corresponds to the priority rule for purchase money security interest in inventory?

Why is filing a financing statement the only practical way to perfect a security interest in equipment?

A _____ serves as constructive notice to the world that the creditor claims an interest in collateral that belongs to a certain named debtor.

Which of the following is a way of perfecting a security interest?

The perfection of a security interest by filing a financing statement:

What type of agreement is required in nearly all security interest transactions?

The basic priority rule for competing security interests is that the first secured party to attach wins.

Under the UCC Secured Transactions Article,for a security interest to attach,the:

Which section of the UCC defines what constitutes default in a secure transaction?

Safeco Corporation manufactures toys for distribution to retailers.In Safeco's hands,the toys are consumer goods.

In which of the following orders are the proceeds from the sale of collateral by the secured party distributed?

Samson Dsouza submits a financing statement in the year 2000 to perfect his security interest against Kevin.Later in the year 2006,Samson tries to attach the security interest in the property.Will Samson succeed in the attachment of the security interest?

Attachment of a security interest is a necessary condition for its perfection.

A security interest is said to be a property interest in the collateral.

Perfection by mere attachment of the security interest does not require giving of public notice.

The Nature of Law

The Resolution of Private Disputes

Business and the Constitution

Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

Criminal Law and Procedure

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Unfair Competition

Introduction to Contracts

The Agreement: Offer

The Agreement: Acceptance

Consideration

Reality of Consent

Capacity to Contract

Illegality

Writing

Rights of Third Parties

Performance and Remedies

Formation and Terms of Sales Contracts

Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contracts

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance Law

Introduction to Credit and Secured Transactions

Bankruptcy

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Transfers

The Agency Relationship

Third-Party Relations of the Principal and the Agent

Introduction to Forms of Business and Formation of Partnerships

Operation of Partnerships and Related Forms

Partners Dissociation and Partnerships Dissolution and Winding up

Limited Liability Companies, Limited Partnerships, and Limited Liability Limited Partnerships

History and Nature of Corporations

Organization and Financial Structure of Corporations

Management of Corporations

Shareholders Rights and Liabilities

Securities Regulation

Legal and Professional Responsibilities of Auditors, Consultants, and Securities Professionals

Administrative Law

The Federal Trade Commission Act and Consumer Protection Laws

Antitrust: the Sherman Act

The Clayton Act, the Robinson-Patman Act, and Antitrust Exemptions and Immunities

Employment Law

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