Exam 27: Secured Transactions

A ________ is a record that evidences both a monetary obligation and a security interest in specific goods and software used in the goods.

To be valid, a security agreement must set forth the creditor's rights on the debtor's default.

A business purchases an airplane from an airplane manufacturer. The business obtains a loan to purchase the airplane from a bank, which obtains a security interest in the airplane. The airplane manufacturer is paid for the airplane out of the proceeds of the loan. This is a(n) ________ transaction.

Which of the following permits a secured lender to recover other property or income from a defaulting debtor if the collateral is insufficient to repay the unpaid loan?

A(n) ________ is property that a debtor acquires after the execution of a security agreement.

Repossession refers to a right granted to a secured creditor to take possession of collateral in the event of a default by the debtor.

A purchase money security interest is an interest that a creditor automatically obtains when he or she extends credit to a consumer to purchase consumer goods.

Article 9 of the Uniform Commercial Code governs secured transactions in personal property.

The inability of a debtor to pay a debt because of bankruptcy does not constitute default.

A creditor who has the only secured interest in the debtor's collateral has priority over unsecured interests.

Attachments are funds advanced to a debtor from a line of credit secured by collateral.

Kimberly borrows $50,000 from a bank. She gives the bank a security interest in her ________ inventory. This implies that if Kimberly does not repay the loan in the stipulated period, the bank can claim any assets she purchased after signing the security agreement.

Tangible personal property includes securities, patents, trademarks, and copyrights.

A ________ is a written document signed by a debtor that creates a security interest in personal property.

Which of the following refers to the assets resulting from the exchange or disposal of collateral subject to a security agreement?

A financing statement covering fixtures is called a continuation statement.

Explain the priority of claims for secured and unsecured transactions.

Perfection ________ is a situation where the creditor does not have to file a financing statement or take possession of the goods to perfect a security interest.

Distinguish between two-party and three-party secured transactions, and provide some examples.

Which of the following terms refers to goods that are physically united with other goods in such a manner that the identity of the original goods is not lost?