Question 1

Assume the bank's filing of the financing statement constitutes a proper perfection,what type of interest does Dryden have in the hang glider?

Accepted Answer

A) Dryden would have a claim against the hang glider only as an unsecured creditor. 
B) Dryden would have a claim against the hang glider based on the amount of the loan. 
C) Dryden would have no claim for the hang glider. 
D) Dryden would be a secured creditor. 
E) Both Dryden and the bank would have an equivalent claim to the hang glider. 
A) Dryden would have a claim against the hang glider only as an unsecured creditor. 
B) Dryden would have a claim against the hang glider based on the amount of the loan. 
C) Dryden would have no claim for the hang glider. 
D) Dryden would be a secured creditor. 
E) Both Dryden and the bank would have an equivalent claim to the hang glider.

Question 2

Explain three advantages described in the text associated with perfection by possession.

Accepted Answer

First,a secured party does not have to g

Question 3

Which of the following is the agreement by which the debtor gives the secured interest to the secured party?

Accepted Answer

A) Secured interest. 
B) Secured transaction. 
C) Debtor agreement. 
D) Security agreement. 
E) Collateral agreement. 
A) Secured interest. 
B) Secured transaction. 
C) Debtor agreement. 
D) Security agreement. 
E) Collateral agreement.

Question 4

A buyer in the ordinary course of business can take goods free of any security interest created by the seller of the goods unless the security interest is perfected,under the UCC.

Accepted Answer

A) True 
 B)False

Question 5

The creditor must perfect a security interest in the collateral of the debtor in order to become a secured party.

Accepted Answer

A) True 
 B)False

Question 6

What rights,if any,does a creditor who does not wish to repossess collateral have in the event of a default,and why might a creditor prefer a remedy other than repossession of collateral?

Accepted Answer

Rather than repossessing collateral,a se

Question 7

An interest in personal property or fixtures that secures payment or performance of an obligation is ________.

Accepted Answer

A) A debt transaction. 
B) An approved interest. 
C) A security agreement. 
D) A secured interest. 
E) A secured transaction. 
A) A debt transaction. 
B) An approved interest. 
C) A security agreement. 
D) A secured interest. 
E) A secured transaction.

Question 8

Which of the following purchases can be perfected automatically?

Accepted Answer

A) A television purchased for an individual's home,but not a delivery van a corporation purchases to deliver product nor a certificate of deposit. 
B) A television purchased for an individual's home and a delivery van a corporation purchases to deliver product,but not a certificate of deposit. 
C) A delivery van a corporation purchases to deliver product,but not a television purchased for an individual's home nor a certificate of deposit. 
D) A television purchased for an individual's home,a delivery van a corporation purchases to deliver product,and a certificate of deposit. 
E) A television purchased for an individual's home,a delivery van a corporation purchases to deliver product,and a certificate of deposit must be perfected by filing. 
A) A television purchased for an individual's home,but not a delivery van a corporation purchases to deliver product nor a certificate of deposit. 
B) A television purchased for an individual's home and a delivery van a corporation purchases to deliver product,but not a certificate of deposit. 
C) A delivery van a corporation purchases to deliver product,but not a television purchased for an individual's home nor a certificate of deposit. 
D) A television purchased for an individual's home,a delivery van a corporation purchases to deliver product,and a certificate of deposit. 
E) A television purchased for an individual's home,a delivery van a corporation purchases to deliver product,and a certificate of deposit must be perfected by filing.

Question 9

Which of the following is true under the UCC regarding a security interest in collateral that has been perfected in one state when the collateral is moved to another state?

Accepted Answer

A) A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of four months from the date that the property is brought into the other state. 
B) A security interest in collateral that has been perfected in one state will generally expire immediately when the collateral is moved to another state. 
C) A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of 30 days from the date that the property is brought into the other state. 
D) A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of six months from the date that the property is brought into the other state. 
E) A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of two months from the date that the property is brought into the other state. 
A) A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of four months from the date that the property is brought into the other state. 
B) A security interest in collateral that has been perfected in one state will generally expire immediately when the collateral is moved to another state. 
C) A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of 30 days from the date that the property is brought into the other state. 
D) A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of six months from the date that the property is brought into the other state. 
E) A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of two months from the date that the property is brought into the other state.

Question 10

What is the term for the type of agreement Michael had with ABC Electronics?

Accepted Answer

A) A collateralized interest. 
B) A pledged money interest. 
C) A security perfection interest. 
D) A purchase-money security interest. 
E) A cash deferred security interest. 
A) A collateralized interest. 
B) A pledged money interest. 
C) A security perfection interest. 
D) A purchase-money security interest. 
E) A cash deferred security interest.

Question 11

Which statement is correct regarding the effect of XYZ Electronics filing a financing statement?

Accepted Answer

A) The interest was perfected. 
B) The interest was acknowledged. 
C) The interest was secured. 
D) The interest was guaranteed. 
E) There was no effect because there can only be one security interest,and the bank already had that. 
A) The interest was perfected. 
B) The interest was acknowledged. 
C) The interest was secured. 
D) The interest was guaranteed. 
E) There was no effect because there can only be one security interest,and the bank already had that.

Question 12

A person or party that has an obligation to the secured party is a ________.

Accepted Answer

A) Secured creditor. 
B) Secured debtor. 
C) Debtor. 
D) Creditor. 
E) Transaction debtor. 
A) Secured creditor. 
B) Secured debtor. 
C) Debtor. 
D) Creditor. 
E) Transaction debtor.

Question 13

The UCC defines default as when a debtor fails to make payments on a loan.

Accepted Answer

A) True 
 B)False

Question 14

The buyer can obtain the good involved free of any security interest,if a buyer purchases chattel paper in the ordinary course of business and without notice of any prior security interest.

Accepted Answer

A) True 
 B)False

Question 15

Shen buys a bicycle on credit from Bike City.Bike City has a security agreement establishing a purchase-money security interest in the bicycle.Shen,however,discovers that he does not have enough money to pay his rent.Therefore,he sells his bicycle to his neighbor,Mindy,who is unaware of Bike City's security interest in the bicycle.Shen fails to make payments on the bicycle and Bike City seeks to repossess it.Discuss the rights and obligations of the parties.

Accepted Answer

Under the UCC,as long as Mindy,the buyer

Question 16

Where should the bank have filed the financing statement?

Accepted Answer

A) The state in which Monte resides. 
B) The state in which the bank is headquartered. 
C) The state in which the branch where Monte took out his loan is located. 
D) Any state that accepts the UCC. 
E) The state in which the hang glider is registered. 
A) The state in which Monte resides. 
B) The state in which the bank is headquartered. 
C) The state in which the branch where Monte took out his loan is located. 
D) Any state that accepts the UCC. 
E) The state in which the hang glider is registered.

Question 17

A bank taking possession of collateral does not have to file a financing statement in order to perfect its interest.

Accepted Answer

A) True 
 B)False

Question 18

[Pottery Store] A&B Bank loaned money to Potter's Pottery Store to finance the purchase of several kilns,a delivery van,and pottery wheels.In return,Potter's granted a security interest to A&B Bank for "all equipment of Potter's".The kiln manufacturer also wants to place a security interest on the kilns and the delivery van for Potter's Pottery.
-If the bank wants to have priority in its loan to the pottery store,how should the bank perfect its interest?

Accepted Answer

A) The bank would have to make a notation on the certificate of title for the van and would have to file a financing statement on the other items. 
B) The interest is perfected automatically because the collateral are goods. 
C) The bank would have to file a financing statement for all items. 
D) The bank would have to make a notation on the certificate of title for the van,but the other items would be perfected automatically. 
E) The bank could make a notation on the certificate of title for the van and on the ownership documents of the other items because they are goods used to conduct business. 
A) The bank would have to make a notation on the certificate of title for the van and would have to file a financing statement on the other items. 
B) The interest is perfected automatically because the collateral are goods. 
C) The bank would have to file a financing statement for all items. 
D) The bank would have to make a notation on the certificate of title for the van,but the other items would be perfected automatically. 
E) The bank could make a notation on the certificate of title for the van and on the ownership documents of the other items because they are goods used to conduct business.

Question 19

Which of the following is not an example of a good?

Accepted Answer

A) Consumer goods. 
B) Documents of title. 
C) Farm products. 
D) Equipment. 
E) Inventory. 
A) Consumer goods. 
B) Documents of title. 
C) Farm products. 
D) Equipment. 
E) Inventory.

Question 20

Which of the following was the result in Helms v.Certified Packaging Corp. ,the case in the text in which the court considered whether settlement proceeds from a negligence lawsuit stemming from a fire that destroyed the collateral should belong to the debtor's bankruptcy estate or the secured creditor?

Accepted Answer

A) The court ruled in favor of the creditor on the basis that the documents evidencing the security interest did not limit the creditor's interest in any way. 
B) The court ruled in favor of the bankruptcy estate on the basis that the trustee made first claim to the settlement proceeds. 
C) The court ruled that the creditor was entitled to the full settlement proceeds,without consideration of the amount of the debt,on the basis that it had a secured interest. 
D) The court ruled in favor of the creditor,regardless of the value of the collateral. 
E) The court ruled in favor of the bankruptcy estate because the documents evidencing the security interest expressly limited the secured creditor's interest. 
A) The court ruled in favor of the creditor on the basis that the documents evidencing the security interest did not limit the creditor's interest in any way. 
B) The court ruled in favor of the bankruptcy estate on the basis that the trustee made first claim to the settlement proceeds. 
C) The court ruled that the creditor was entitled to the full settlement proceeds,without consideration of the amount of the debt,on the basis that it had a secured interest. 
D) The court ruled in favor of the creditor,regardless of the value of the collateral. 
E) The court ruled in favor of the bankruptcy estate because the documents evidencing the security interest expressly limited the secured creditor's interest.

Exam 30: Secured Transactions

Assume the bank's filing of the financing statement constitutes a proper perfection,what type of interest does Dryden have in the hang glider?

Explain three advantages described in the text associated with perfection by possession.

Which of the following is the agreement by which the debtor gives the secured interest to the secured party?

A buyer in the ordinary course of business can take goods free of any security interest created by the seller of the goods unless the security interest is perfected,under the UCC.

The creditor must perfect a security interest in the collateral of the debtor in order to become a secured party.

What rights,if any,does a creditor who does not wish to repossess collateral have in the event of a default,and why might a creditor prefer a remedy other than repossession of collateral?

An interest in personal property or fixtures that secures payment or performance of an obligation is ________.

Which of the following purchases can be perfected automatically?

Which of the following is true under the UCC regarding a security interest in collateral that has been perfected in one state when the collateral is moved to another state?

What is the term for the type of agreement Michael had with ABC Electronics?

Which statement is correct regarding the effect of XYZ Electronics filing a financing statement?

A person or party that has an obligation to the secured party is a ________.

The UCC defines default as when a debtor fails to make payments on a loan.

The buyer can obtain the good involved free of any security interest,if a buyer purchases chattel paper in the ordinary course of business and without notice of any prior security interest.

Where should the bank have filed the financing statement?

A bank taking possession of collateral does not have to file a financing statement in order to perfect its interest.

Which of the following is not an example of a good?

An Introduction to Dynamic Business Law

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