Question 1

A lien that is expanded to cover any additional property that is acquired by the debtor while the debt is outstanding is known as a:

Accepted Answer

A) tax lien. 
B) possessory lien. 
C) floating lien. 
D) blanket lien. 
E) judgment lien. 
A) tax lien. 
B) possessory lien. 
C) floating lien. 
D) blanket lien. 
E) judgment lien. C

Question 2

A person who promises to act or pay upon the default of another is known as an):

Accepted Answer

A) surety. 
B) debtor. 
C) payee. 
D) obligor. 
E) pledger. 
A) surety. 
B) debtor. 
C) payee. 
D) obligor. 
E) pledger. A

Question 3

If,at a time a surety's obligation has matured,the principal can satisfy the obligation but refuses to do so,the surety is entitled to a court order requiring the principal to perform.This is known as:

Accepted Answer

A) contribution. 
B) perfection. 
C) foreclosure. 
D) exoneration. 
E) subrogation. 
A) contribution. 
B) perfection. 
C) foreclosure. 
D) exoneration. 
E) subrogation. D

Question 4

Attachment is the process by which a security interest becomes enforceable against the debtor with respect to the collateral.

Accepted Answer

A) True 
 B)False

Question 5

A person who owes money to another is known as an obligor.

Accepted Answer

A) True 
 B)False

Question 6

A person who owes money or a duty of performance to another is known as an):

Accepted Answer

A) obligor. 
B) creditor. 
C) pledger. 
D) bailer. 
E) debtor. 
A) obligor. 
B) creditor. 
C) pledger. 
D) bailer. 
E) debtor.

Question 7

The property given as security for a debt is known as a:

Accepted Answer

A) proceed. 
B) lien. 
C) mortgage. 
D) collateral. 
E) pledge. 
A) proceed. 
B) lien. 
C) mortgage. 
D) collateral. 
E) pledge.

Question 8

Security obtained through operation of law is known as a:

Accepted Answer

A) pledge. 
B) bequest. 
C) lien. 
D) collateral. 
E) mortgage. 
A) pledge. 
B) bequest. 
C) lien. 
D) collateral. 
E) mortgage.

Question 9

The substitution of one person for another who has a legal claim or right is known as:

Accepted Answer

A) subrogation. 
B) exoneration. 
C) foreclosure. 
D) contribution. 
E) perfection. 
A) subrogation. 
B) exoneration. 
C) foreclosure. 
D) contribution. 
E) perfection.

Question 10

A surety is a person who promises to pay or perform an obligation owed by the guarantor.

Accepted Answer

A) True 
 B)False

Question 11

After-acquired property refers to the proceeds received from the disposition of the collateral.

Accepted Answer

A) True 
 B)False

Question 12

Accessions are goods that are physically united with other goods in such a manner that the identity of the original good is lost.

Accepted Answer

A) True 
 B)False

Question 13

A chattel mortgage refers to a debt secured against land,buildings,and fixtures.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a type of loan for which no collateral is pledged?

Accepted Answer

A) Commercial loan 
B) Signature loan 
C) Character loan 
D) Unsecured loan 
E) Guaranteed loan 
A) Commercial loan 
B) Signature loan 
C) Character loan 
D) Unsecured loan 
E) Guaranteed loan

Question 15

If a security interest was not perfected at the time of filing for bankruptcy,a bankruptcy trustee cannot take the collateral.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is true of the rule of priorities regarding the disposal of a debtor's property when the debtor defaults?

Accepted Answer

A) Persons who become lien creditors before or after the security interest is perfected win. 
B) If the security interest was perfected at the time of filing for bankruptcy,the bankruptcy trustee can take the collateral. 
C) The Bankruptcy Act provides that a bankruptcy trustee can avoid a transfer of an interest of the debtor in property to or for the benefit of a creditor. 
D) A perfected purchase-money security interest in goods other than inventory or livestock has priority over a conflicting security interest in the same goods. 
E) A mortgage has priority over a perfected security in fixtures,even if the security interest is a purchase-money security interest. 
A) Persons who become lien creditors before or after the security interest is perfected win. 
B) If the security interest was perfected at the time of filing for bankruptcy,the bankruptcy trustee can take the collateral. 
C) The Bankruptcy Act provides that a bankruptcy trustee can avoid a transfer of an interest of the debtor in property to or for the benefit of a creditor. 
D) A perfected purchase-money security interest in goods other than inventory or livestock has priority over a conflicting security interest in the same goods. 
E) A mortgage has priority over a perfected security in fixtures,even if the security interest is a purchase-money security interest.

Question 17

A lien is security obtained through operation of law.

Accepted Answer

A) True 
 B)False

Question 18

The debtor's rights in collateral must be immediate rights to the possession but need not necessarily be rights that can be conveyed.

Accepted Answer

A) True 
 B)False

Question 19

In strict foreclosure,a secured creditor can accept the collateral in full satisfaction or partial satisfaction of the debt.

Accepted Answer

A) True 
 B)False

Question 20

A judicial bond is an assurance,generally purchased by an employer,to cover employees who are entrusted with valuable property or funds.

Accepted Answer

A) True 
 B)False

Exam 11: Secured Transactions and Suretyship

A lien that is expanded to cover any additional property that is acquired by the debtor while the debt is outstanding is known as a:

A person who promises to act or pay upon the default of another is known as an):

If,at a time a surety's obligation has matured,the principal can satisfy the obligation but refuses to do so,the surety is entitled to a court order requiring the principal to perform.This is known as:

Attachment is the process by which a security interest becomes enforceable against the debtor with respect to the collateral.

A person who owes money to another is known as an obligor.

A person who owes money or a duty of performance to another is known as an):

The property given as security for a debt is known as a:

Security obtained through operation of law is known as a:

The substitution of one person for another who has a legal claim or right is known as:

A surety is a person who promises to pay or perform an obligation owed by the guarantor.

After-acquired property refers to the proceeds received from the disposition of the collateral.

Accessions are goods that are physically united with other goods in such a manner that the identity of the original good is lost.

A chattel mortgage refers to a debt secured against land,buildings,and fixtures.

Which of the following is a type of loan for which no collateral is pledged?

If a security interest was not perfected at the time of filing for bankruptcy,a bankruptcy trustee cannot take the collateral.

Which of the following is true of the rule of priorities regarding the disposal of a debtor's property when the debtor defaults?

A lien is security obtained through operation of law.

The debtor's rights in collateral must be immediate rights to the possession but need not necessarily be rights that can be conveyed.

In strict foreclosure,a secured creditor can accept the collateral in full satisfaction or partial satisfaction of the debt.

A judicial bond is an assurance,generally purchased by an employer,to cover employees who are entrusted with valuable property or funds.

Introduction to Law and Legal Systems

Corporate Social Responsibility and Business Ethics

Courts and the Legal Process

Constitutional Law and Uscommerce

Administrative Law

Criminal Law

Introduction to Tort Law

Contracts

Products Liability

Consumer Credit Transactions

Mortgages and Nonconsensual Liens

Bankruptcy

Relationships Between Principal and Agent

Liability of Principal and Agent; Termination of Agency

Employment Law

Labor-Management Relations

Partnerships: General Characteristics and Formation

Partnership Operation and Termination

Hybrid Business Forms

Corporation: General Characteristics and Formation

Legal Aspects of Corporate Finance

Corporate Powers and Management

Securities Regulation

Corporate Expansion,state and Federal Regulation of Foreign Corporations,and Corporate Dissolution

Antitrust Law

Unfair Trade Practices and the Federal Trade Commission

The Nature and Regulation of Real Estate and the Environment

Introduction to Property: Personal Property and Fixtures

Intellectual Property

The Transfer of Real Estate by Sale

Landlord and Tenant Law

International Law

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